Introduction

This study examines the legal consequences faced by the debtor and the legal remedies available to them in case a concordat application is rejected by the court, in light of analyses of judicial decisions. The analyses show that the rejection of a concordat request leads to different outcomes depending on the debtor’s legal status (whether or not they are subject to bankruptcy). The main consequences include the debtor being declared bankrupt, the lifting of protective measures provided during the concordat process, and creditors being able to continue their enforcement actions. However, the debtor also has options such as appealing the rejection decision through legal remedies like regional appeal and Supreme Court appeal, reapplying for concordat under certain conditions, or attempting out-of-court settlement methods.

1. Legal Consequences After the Rejection of a Concordat Request

Judicial decisions reveal varying consequences depending on the debtor’s legal and financial situation in case of a concordat request rejection.

a. Issuance of a Bankruptcy Decision For debtors subject to bankruptcy (usually companies), the most frequently encountered outcome is the decision to declare their bankruptcy along with the rejection of their concordat request. Courts, in cases where it is understood that the concordat project cannot succeed, the debtor is insolvent, or there is a necessity to protect assets, issue this decision ex officio in accordance with Article 292 of the EBL. In a decision by the Ankara Regional Court of Justice, this situation was clearly stated as follows: “It is regulated in the same article that if the concordat request is rejected, the debtor’s bankruptcy will also be decided. Even if the debtor is not insolvent, a bankruptcy decision must be issued when the concordat request is rejected pursuant to Article 292 of the EBL.” (bam-Ankara 23. HD-2025/1130). Similarly, many first instance and Supreme Court decisions confirm that a direct bankruptcy decision is issued upon the rejection of the request (yargitay-6. HD-2021/4143; ilkDerece-Ankara 1. ATM-2023/185).

b. Situations Where Bankruptcy Is Not Declared However, a rejection decision does not automatically mean bankruptcy. The debtor’s legal status is decisive at this point. Even if the concordat request is rejected for real persons not subject to bankruptcy, a bankruptcy decision cannot be issued. In the decision of Bakırköy 3rd Civil Court of Commerce, “it was stated that the definitive moratorium should be lifted for real persons not subject to bankruptcy and the concordat request should be rejected” (First Instance-Bakırköy 3. CCoC-2022/219). Furthermore, even if it is a company subject to bankruptcy, the court may not declare bankruptcy if it concludes, upon examination, that the company is not in a state of insolvency. In a decision of the Istanbul Regional Court of Justice, it was emphasized that no bankruptcy decision was issued for the debtor company “taking into consideration that it was not insolvent” (RCJ-Istanbul 17. CD-2025/429).

c. Lifting of Protective Measures and Other Consequences Whether a bankruptcy decision is issued or not, all protections granted to the debtor cease upon the rejection of the concordat request. Courts decide on “the lifting of the provisional moratorium decision”, “the lifting of precautionary measures” and “the termination of the duties of the board of concordat commissioners” (First Instance-Ankara 1. CCoC-2023/185). This situation allows creditors to continue halted enforcement proceedings and initiate new ones. Indeed, in one decision, it is observed that enforcement proceedings continued after the rejection of the concordat request (First Instance-Antalya 4. CCoC-2020/340).

2. Legal Remedies and Other Options Available to the Debtor

A debtor whose concordat request has been rejected may resort to various legal remedies against the decision.

a. Legal Remedies: Appeal and Cassation The debtor’s most fundamental right is to apply for legal remedies against the rejection decision. Decisions generally state that the right to appeal is open within two weeks from the notification of the rejection decision (ilkDerece-Sakarya ATM-2023/198; ilkDerece-Kayseri 1. ATM-2025/324). If the appeal application is also rejected, the path to cassation is open before the Supreme Court. In a Supreme Court decision, “The decision has been appealed by the plaintiff’s attorney” this process is clearly seen with this statement (yargitay-15. HD-2021/640). An appeal application may lead to the reversal of the first instance court’s decision. In a decision by the Ankara Regional Court of Justice, there is an example where the first instance court’s rejection decision was overturned following an appeal review, and the concordato request was accepted and the project approved (bam-Ankara 23. HD-2025/854). Furthermore, procedural errors, such as “the authorized representative of the debtor companies requesting concordato not being summoned and heard by the court during the trial,” can lead to the annulment of the decision by a higher court (yargitay-15. HD-2021/2921).

b. Reapplication for Concordat Court decisions indicate that, as a rule, the rejection of a concordat request does not preclude a new application. In a court decision, “In case of waiver or rejection of the concordat request, there is, as a rule, no obstacle to re-applying for a concordat for the same debtor” it was stated (First Instance-Istanbul Anatolian 1st Commercial Court-2025/43). However, this right should not be abused. Especially, it has been stated that if the previous application was rejected due to the debtor’s dishonest conduct, a re-application cannot be made, and the court “should be more meticulous” when examining the new application (Regional Court of Justice-Sakarya Regional Court of Justice 7th Civil Chamber-2024/1062).

c. Out-of-Court Agreement A decision by the Erzurum Regional Court of Justice indicates an alternative path the debtor can pursue. According to this, the debtor, “can meet with creditors individually and make a mutual agreement on debt payment without involving official authorities in the process.” This path is referred to as “out-of-court concordat” and provides the debtor with the opportunity to negotiate directly with their creditors (Regional Court of Justice-Erzurum Regional Court of Justice 3rd Civil Chamber-2021/1891).

Conclusion

The judicial decisions reviewed reveal that the rejection of a concordat application leads to serious consequences for the debtor, but these consequences are not uniform. While the most likely outcome for companies subject to bankruptcy is a declaration of bankruptcy, for real persons not subject to bankruptcy or companies not in a state of insolvency, only the lifting of protective measures may be in question. In any case, the debtor has the right to appeal to effective legal remedies such as appeal and cassation against the rejection decision. Procedural errors during the judicial process can provide a significant basis for the annulment of the decision. Furthermore, if the conditions are met, reapplying for a concordat or reaching an out-of-court settlement with creditors are among the options that can be considered by the debtor. An article suggestion.

Why is Expert Concordat Lawyer Support Necessary?

The rejection of a concordat application by the court; can lead to very severe consequences such as a bankruptcy declaration, lifting of stay and protective measures, resumption of enforcement proceedings, and the debtor suffering serious financial losses. Therefore, concordat is not an ordinary debt restructuring process; it is a special procedure strictly bound by the Enforcement and Bankruptcy Law, requiring advanced legal and financial expertise.

Judicial decisions clearly show that incorrectly prepared concordat preliminary projects, missing documents, wrongly arranged comparative tables, financial analysis errors, or payment plans contrary to the principle of equality directly lead to the rejection of the application.

Therefore, the guidance of an expert concordat lawyer is of vital importance for the success of the process.

Critical contributions provided by an expert concordat lawyer:

Preparation of all mandatory documents completely and in accordance with the procedure

Submission of financial statements that are accurate, current, and true to reality

Creation of a concordat project that is proportionate to resources, feasible, and meets the criteria sought by the courts

Correct calculation and strategic management of the creditor majority

Proper guidance of commissioner reports

Meeting all criteria ex officio investigated by the court during the approval phase

If the application is rejected, the correct use of appeal-cassation legal remedies, the determination of a new application strategy, and, if necessary, the evaluation of out-of-court debt restructuring options are only possible with expertise.

2M Hukuk Law Office, based in Istanbul-Tuzla, offers professional legal support in concordat application, moratorium, and approval processes in the regions of Pendik, Kartal, Maltepe, Ataşehir, Kadıköy, Şekerpınar, Darıca, Çayırova, Dilovası, Gebze, and Tepeören.

Experienced concordat lawyers maximize the probability of concordat success by managing all stages of the process, from the preparation of the file to the approval trial.