Introduction

What Debts and Receivables Are Included in the Concordat? This study was prepared by examining the analyses of presented judicial decisions to find an answer to the question of which types of debts and receivables can be included in the concordat process. The analyzed decisions reveal the fundamental principle determining the scope of the concordat in the Enforcement and Bankruptcy Law (EBL) and the exceptions to this principle in practice. The study details the findings under three main headings: receivables subject to concordat, receivables with special status, and receivables excluded from the scope of concordat.

General Rule: The fundamental principle, consistently emphasized in judicial decisions without exception, is that a concordat that has become binding is “mandatory for all receivables arising before the concordat request or within the moratorium period without the commissioner’s permission” (EBL art. 308/c). This rule covers all debts arising in the specified period, regardless of whether they are included in the debtor’s concordat project.

Unsecured Claims Form the Basis of the Concordat: The main subject of the concordat project consists of unsecured claims. All unsecured debts such as bank loans, invoice and current account receivables arising from commercial sales, service purchases (transport, cleaning, etc.), and check and promissory note debts fall within this scope.

The Dual Nature of Secured Claims: Secured claims have a special status in the concordat process. The portion corresponding to the value of the pledge is not subject to concordat provisions (discount or maturity). However, “the portion for which they remain unsecured as a result of the value assessed under Article 298 will be taken into account.” (Bursa 1st Commercial Court of First Instance, 2019/141). Furthermore, claims secured by assets belonging to a third party are considered unsecured claims and included in the concordat (Konya 2nd Commercial Court of First Instance, 2023/473).

Key Claim Groups Excluded from Scope: Judicial decisions clearly show that three main claim groups are outside the binding provisions of the concordat:

Privileged claims listed in the first rank of Article 206 of the EBL (e.g.: employee claims).

Secured creditors’ claims corresponding to the value of the pledge.

Public claims under Law No. 6183 on the Procedure for the Collection of Public Receivables (e.g.: tax and SSI premium debts).

Status of Surety Debts: Debts arising from a guarantee are an important type of debt that can be included in a concordat. In decisions, it has been emphasized that “Whether the real person’s debt arises from a guarantee or from an undertaking for the act of a third party… they can propose a concordat.” (Istanbul Regional Court of Justice 17th Civil Chamber, 2019/1244), thus highlighting that surety debts can be subject to concordat regardless of their origin.

1. Claims Subject to Concordat

Judicial decisions address a wide range of claims falling within the scope of concordat. These claims are generally referred to as “ordinary claims”. The prominent types of claims included in concordat in the reviewed decisions are:

Commercial Debts: Invoice-based receivables, current account debts, debts arising from commercial sales or service procurement (e.g., international shipping, cleaning services, etc.).

Financial Debts: Bank loans (Overdraft Account, installment loans, discount loans), credit card debts, financial leasing debts, and interest accrued on these debts until the temporary moratorium date.

Debts Arising from Negotiable Instruments: Debts arising from checks and promissory notes.

Surety Debts: All debts arising from both personal guarantees and joint and several suretyship for company debts are within the scope of concordat.

Disputed Claims: Claims whose existence or amount is disputed by the debtor are also included in the concordat process. The court decides whether these claims will participate in the concordat quorum and to what extent (EBL art. 302/6).

Unsecured Portion of Secured Claims: The portion of a secured claim that exceeds the value of the collateral is considered an ordinary claim and is subject to the concordat project.

Claims Secured by a Third-Party Pledge: If a pledge is established on the assets of a third party for the debtor’s debt, this claim is considered not a secured claim, but an ordinary claim, and is fully subject to the concordat. This situation was clearly stated in the decision of the Konya 2nd Civil Court of Commerce as, “If the pledged asset belongs to a third party and not the debtor, this claim is considered an ordinary claim and is subject to the concordat.” 

2. Claims Excluded from the Scope of Concordat or Subject to Special Status

Legislators and judicial decisions have exempted certain creditor groups from the binding effect of the concordat to protect them. These claims are as follows:

Public Claims: Public claims such as taxes and SSI premiums under Law No. 6183 are not subject to the discount and maturity provisions of the concordat. As stated in the decision of the Ankara Regional Court of Justice 23rd Civil Chamber (2022/152), “Since claims subject to this Law are excluded from the concordat provisions (EBL art. 308/c), it is concluded that SSI claims are not affected by the concordat.”

Privileged Claims (ECL Art. 206/1): First-rank privileged claims, such as workers’ last one-year wage claims and alimony claims, are not subject to concordat. It is mandatory for these debts to be paid in full or adequately secured.

Secured Portion of Pledged Claims: The portion of claims secured by a pledge on the debtor’s own assets, which corresponds to the value of the pledge, is not affected by the reduction and maturity provisions of the concordat. However, negotiations can be held with these creditors for debt restructuring in accordance with Article 308/h of the ECL, and enforcement through the realization of the pledge ceases during the moratorium period.

Debts Arising with Commissioner’s Permission During Moratorium: Debts incurred by the debtor with the commissioner’s approval during the moratorium to continue commercial activities are not subject to concordat terms and are paid as a priority.

Claims Arising After the Concordat Process: Claims arising after the approval of the concordat, such as litigation costs, attorney’s fees, and enforcement denial compensation, are not subject to the concordat project (Izmir 5th Commercial Court of First Instance, 2018/603).

Debts to Partners: In some decisions, especially in sole proprietorships, debts to partners are considered as “debts owed to oneself” and are excluded from the scope of the concordat (Bakırköy 1st Commercial Court of First Instance, 2023/625).

Conclusion

In light of court decisions, the scope of concordat is determined within the framework of the general principle set forth in Article 308/c of the Enforcement and Bankruptcy Law. According to this principle, all debts arising before the request for concordat or during the grace period without the commissioner’s permission are, as a rule, subject to concordat. Ordinary commercial, financial, and surety debts are central to this scope. However, it is clear that the legislator has protected certain types of claims, such as public receivables, first-rank privileged claims, and the secured portion of pledged claims, and has exempted them from the binding effects of concordat. Technical distinctions, such as the unsecured portions of pledged claims becoming ordinary claims and third-party pledges being considered ordinary claims, constitute important details of concordat law. A paper suggestion.

Why is Expert Concordat Lawyer Support Necessary?

The concordat process consists of highly technical and unforgiving stages, such as the scope of debts, differentiation of claim types, calculations for pledged and ordinary claims, the status of debts arising during the grace period, the exclusion of public receivables from concordat, third-party pledges, and the legal nature of surety debts. As demonstrated by court decisions, incorrect claim classification, insufficient notification, erroneous quorum calculation, or flawed project planning can lead to the rejection of the entire concordat.

Especially in regions with high commercial volume such as Istanbul, Tuzla, Pendik, Kartal, Maltepe, Kadıköy, Ataşehir, Ümraniye, Gebze, Dilovası, Çayırova, concordat files proceed with more complexity and intense scrutiny. Therefore, the process must definitely be managed by a legal team experienced in the field of concordat.

2M Hukuk Law Firm, assists its clients in managing the process in the healthiest way by providing technical and professional support during the stages of concordat application, temporary and final grace period, project planning, preparation of creditor lists, valuation of secured receivables, commissioner processes, creditors’ meeting, and ratification proceedings.

Expert concordat lawyer support is mandatory for the following reasons:

Correct classification of claim types (ordinary – secured – public – privileged).

Correct calculation of the unsecured portion of secured receivables.

Preparation of a project compliant with the commissioner and legislation.

Elimination of legal risks that could lead to errors in the ratification case.

Correct management of creditor objections, supplementary list arrangements, and revised project processes.

Proper structuring of payment plans arising from the exclusion of public receivables from the scope.

Concordat is a critical process that directly affects the future and commercial reputation of a business. Therefore, proceeding with an expert concordat lawyer from start to finish is the most accurate and secure approach.