Introduction

What is the duration of the concordat, and what are the stages of this period? This study examines the legal durations of the concordat process and the stages these durations consist of, based on the literature sources provided. The examinations are based on the current concordat moratorium system that took shape after the amendments made in 2018 with Law No. 7101. The study shows that the concordat process will be discussed in three main timeframes: temporary moratorium, definitive moratorium, and confirmation stage.

According to the information in the literature, the concordat process consists of successive stages with possibilities for extension. The process begins with the court’s decision for a temporary moratorium, continues with a definitive moratorium, and may conclude with the confirmation proceedings.

1. Phased Structure of Concordat Durations

The legal regulations made in 2018 have established a dual structure for the concordat respite: provisional respite and final respite. Before this amendment, the concordat respite consisted of a single stage. Prior to the 2018 amendment, the respite was regulated under the heading “respite” in Article 287, without a distinction between provisional and final. If the conditions were met, the Debtor would be granted a three-month respite by the Enforcement Law Court. Upon the commissioner’s proposal, this period could be extended by two months. Thus, the respite period consisted of five months. However, with the 2018 amendment, the respite was divided into two: “provisional respite” regulated in Article 287, and “final respite” in Article 289. This staggered structure allows for a more detailed examination of the debtor’s financial situation and a healthier assessment of the concordat’s chances of success.

2. Provisional Respite Stage

The provisional respite, which is the first step of the concordat process, is regulated in Article 287 of the Enforcement and Bankruptcy Law (EBL).

Duration and Extension: The duration is, as a rule, 3 months. The fourth paragraph of Article 287 of the Enforcement and Bankruptcy Law stipulates that a three-month provisional respite shall be granted, and if necessary, this period may be extended by another two months. Therefore, the provisional respite can be a maximum of five months.

Extension Request: The authority to request an extension is limited. The creditor does not have the authority to request an extension of the provisional respite period. The total duration of the provisional respite cannot exceed five months. The extension request can be made by the debtor or the provisional commissioner. If the debtor makes the request, the opinion of the provisional commissioner is obtained.

3. Definitive Stay Phase

At the end of the provisional stay, upon realizing that the concordat is likely to succeed, the court grants the debtor a definitive stay.

Duration and Extension: Pursuant to Article 289 of the EBL, the duration of the definitive stay is one year. If the court concludes that the concordat is likely to succeed, it grants the debtor a one-year definitive stay. This period may be extended by the court for up to six months upon a reasoned report and request from the commissioner in “special circumstances presenting difficulties”. In this case, the definitive stay totals 18 months.

Debate on the Nature of the One-Year Period: In legal literature, there are differing views on whether the one-year definitive stay granted by the court is a maximum period or a fixed period.

Fixed Period View: Some authors argue that the law’s explicit statement, “the debtor is granted a one-year definitive stay,” does not allow for discretionary power.

Maximum Period View: According to another view, this period should be considered a maximum, and the court should be able to rule for a shorter duration. The regulation in the Enforcement and Bankruptcy Law should not be understood as directly granting a one-year definitive stay in every concordat application by the court; instead, it should be accepted that the law regulates the upper limit of the period. This view aims to prevent the debtor from becoming complacent.

4. Confirmation Proceedings and Total Duration

During the definitive respite, a creditors’ meeting is held and the concordat project is voted on. If the project is accepted, its approval is requested from the court. This litigation process can also affect the total duration of the concordat respite. In addition to these total twenty-three-month temporary and definitive respite periods, it is possible for the court to decide on the continuation of the respite provisions until a decision is made regarding the approval of the concordat, not exceeding six months, in the proceedings carried out for the approval of the concordat within the scope of Article 304, paragraph 2 of the EBL. This additional period provides a safeguard, especially in complex cases, against the possibility of the proceedings not being completed within the respite periods.

Conclusion

In light of the presented literature, the duration and stages of the concordat process can be summarized as follows:

Stages: The concordat process, with the legal changes in 2018, has been divided into two main stages: “temporary respite” and “definitive respite”.

Durations:

Temporary Respite: 3 months + 2 months extension = Maximum 5 months.

Definitive Respite: 1 year + 6 months extension = Maximum 18 months.

Approval Proceedings: Possibility of extending the respite provisions by another 6 months.

Total Duration: When all extension possibilities are utilized, the total duration of the concordat period until the approval decision can reach a maximum of 29 months. This period represents a comprehensive timeframe designed for the debtor to improve their financial situation and reach an agreement with creditors. In literature, there is also a doctrinal debate regarding whether the initial period of the definitive respite is fixed or maximum. A paper suggestion.

Why is Expert Concordat Lawyer Support Necessary?

The concordat process has a multi-stage and technical structure, including provisional respite, definitive respite, extensions, commissioner supervision, creditors’ meeting, and approval proceedings. Even a small error made in this process, which requires high expertise from both legal and financial perspectives, can lead to the rejection of the concordat or even the direct bankruptcy of the debtor. Therefore, concordat applications must be prepared and managed by an expert concordat lawyer.

An expert concordat lawyer:

Ensures the correct management of provisional and definitive respite periods.

Ensures the preparation of the concordat preliminary project in full compliance with the law.

Ensures that financial statements and appendices are error-free.

Ensures strategic planning to secure a majority of creditors.

Ensures the correct guidance of commissioner reports and expert witness processes.

Ensures that a defense is made in accordance with the criteria sought by the court during the approval phase.

Without this professional approach, the likelihood of making mistakes within the complex moratorium system of the concordat process is very high.

2M Hukuk Avukatlık Ofisi,
provides professional legal consultancy with expert concordat lawyers in the concordat application, temporary moratorium, definitive moratorium, and approval processes in the regions of Istanbul – Tuzla, Pendik, Kartal, Maltepe, Gebze, Darıca, Çayırova, Dilovası, Şekerpınar, and Tepeören.

The office significantly increases the likelihood of the concordat succeeding by effectively managing all processes, from the preparation of the concordat preliminary project to the administration of the commissioner process, and from the moratorium strategy to the confirmation lawsuit.