{"id":143596,"date":"2026-07-08T11:19:13","date_gmt":"2026-07-08T11:19:13","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=143596"},"modified":"2026-07-10T07:52:47","modified_gmt":"2026-07-10T07:52:47","slug":"turkiye-restructuring-insolvency","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/turkiye-restructuring-insolvency\/","title":{"rendered":"Turkey: Restructuring &amp; Insolvency"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-143596","comparative_guide","type-comparative_guide","status-publish","hentry","guides-restructuring-insolvency","jurisdictions-turkiye"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Egemenoglu Hukuk Burosu<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/06\/EGEMENOGLU-LOGO-2.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Egemenoglu Hukuk Burosu<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/06\/EGEMENOGLU-LOGO-2.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Restructuring &amp; Insolvency laws and regulations applicable in Turkey<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What forms of security can be granted over immovable and movable property? What formalities are required and what is the impact if such formalities are not complied with?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish law, various types of security are provided for in respect of movable and immovable property, each of which is subject to specific formal requirements. The most common form of security relating to immovable property is the mortgage, which is regulated by Article 881 and the following articles of the Turkish Civil Code. A mortgage allows the creditor to secure their claim while enabling the debtor to retain ownership of the immovable property. With this characteristic, it serves as a real security that strikes a balance between the parties. For a valid mortgage to be established, the conditions stipulated by law must be fully met. In this context, a formal deed must first be drawn up at the Land Registry Office, and the mortgage right must then be registered in the Land Registry. This registration is constitutive in nature for the validity of the mortgage. In addition, the secured claim must be clearly defined by specifying either its amount or a maximum limit. Failure to comply with these formal requirements renders the mortgage legally invalid, and no security arises in favour of the creditor.<\/p>\n<p>The establishment of security over movable property is primarily based on the institution of movable pledge. Regulated under Article 939 and the following articles of the Turkish Civil Code, a movable pledge is, as a rule, created by the delivery of the pledged asset to the creditor. The validity of the pledge requires a written agreement and the transfer of possession. However, there are exceptions to this rule for certain types of pledges. For instance, in the case of a commercial enterprise pledge, the transfer of possession is not required; instead, the agreement must be executed before a notary . Similarly, in specific cases such as motor vehicle pledges, notarial procedures and notification to the relevant registries are required. Failure to comply with these formal requirements results in the pledge either not coming into existence or not being enforceable against third parties.<\/p>\n<p>In Turkish law, the validity of real securities largely depends on compliance with certain formal requirements and the completion of procedural acts such as registration. Failure to comply with these formal requirements may result in significant consequences, including the invalidity of the security or its its unenforceability against third parties. Therefore, strict adherence to these formal rules is of great importance in both the establishment and implementation of securuity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What practical issues do secured creditors face in enforcing their security package (e.g. timing issues, requirement for court involvement) in out-of-court and\/or insolvency proceedings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish law, there is no system that allows a creditor to collect a debt directly through extrajudicial means; therefore, it is necessary to resort to compulsory enforcement procedures. In the case of collateral such as mortgages and pledges of movable property, the creditor cannot directly convert the collateral into cash but must act through enforcement or bankruptcy authorities. The absence in Turkish law of the out-of-court conversion options seen in Anglo-American law reduces the effectiveness of collateral and delays the collection of the debt.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What restructuring and rescue procedures are available in the jurisdiction, what are the entry requirements and how is a restructuring plan approved and implemented? Does management continue to operate the business and \/ or is the debtor subject to supervision? What roles do the court and other stakeholders play?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Turkish law, several mechanisms exist to restructure financially distressed companies and prevent bankruptcy. These mechanisms operate either under court supervision or on a contractual basis. The most prominent judicial mechanism is the concordat, regulated under Articles 285 et seq. of the Enforcement and Bankruptcy Law.<\/p>\n<p>The concordat allows debtors who are insolvent or at risk of insolvency to restructure their debts with creditors, usually through extended payment terms or partial reductions. The process begins with a court application. If accepted, the court grants a temporary respite and appoints a commissioner.<\/p>\n<p>During this period, the debtor may continue its ordinary business activities, while significant transactions require approval. If a definitive respite is granted, a concordat plan prepared under the commissioner\u2019s supervision is submitted to creditors. The plan becomes binding once it is approved by the required majority of creditors and confirmed by the court. The court assesses both the fairness of the plan and the debtor\u2019s ability to perform it.<\/p>\n<p>Financial Restructuring Framework Agreements (FRFA), introduced under the Banking Law No. 5411, play a significant and effective role in the restructuring of debts owed to the financial sector. This mechanism operates within a contractual framework between the debtor and creditor banks and financial institutions, enabling the restructuring of debts through various measures such as extending repayment maturities, reducing interest rates, or settling obligations through the transfer of specific assets.<\/p>\n<p>The process is conducted out of court and requires that the debtor be in financial distress while still possessing the capacity to maintain its operations. A restructuring plan enters into force with the participation of at least two creditor institutions and the approval of creditors representing at least two-thirds of the total outstanding debt. In this respect, the FRFA serves as an effective tool that facilitates coordination among financial institutions and aims to restore the debtor\u2019s financial viability in a sustainable manner.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a debtor in restructuring proceedings obtain new financing and are any special priorities afforded to such financing (if available)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Access to new financing is crucial for debtors undergoing restructuring; however, the lack of clear regulation creates practical difficulties. In the concordat procedure, although the debtor may continue its business activities, obtaining new financing remains limited and uncertain. The law does not clearly grant priority status to such financing, which increases the risk for lenders and reduces the availability of new credit.<\/p>\n<p>By contrast, under the Financial Restructuring Framework Agreements (FRFA), new financing is addressed in a more flexible and structured manner. As the process is contractual, the terms and any priority of new financing are determined by agreement. Financial institutions may grant priority repayment status and require collateral. Although such financing does not benefit from statutory priority, these contractual protections encourage lenders to provide fresh funding, making FRFA a more effective mechanism in practice.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a restructuring proceeding release claims against non-debtor parties (e.g. guarantees granted by parent entities, claims against directors of the debtor), and, if so, in what circumstances?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In restructuring processes, waiving claims against third parties other than the debtor (such as parent companies, group companies, or directors) is theoretically possible, but it is rarely seen in practice.<\/p>\n<p>Under the Enforcement and Bankruptcy Law, restructuring proceedings such as concordat cover only the debts of the debtor. These processes do not eliminate the liability of non-debtor parties. In other words, any reduction of the debtor\u2019s debts or restructuring through a payment plan applies only to the debtor; the liabilities of guarantors or parent companies providing guarantees remain unaffected. As clearly stipulated by law, the restructuring of a debt does not extinguish the obligations of jointly liable third parties. Therefore, creditors may pursue their claims independently against both the debtor and guarantors or other third parties.<\/p>\n<p>On the other hand, Financial Restructuring Framework Agreements (FRA) provide a more flexible mechanism. Under such contractual arrangements, the liabilities of non-debtor parties may be released if all creditors consent. However, this is only possible through the explicit agreement of the parties. Such arrangements are typically implemented through comprehensive settlements (global settlements) that balance the mutual interests of all parties involved.<\/p>\n<p>Furthermore, claims against company directors (for example, due to mismanagement or causing damage) fall outside the scope of restructuring processes. These liabilities are independent of the restructuring of debts and may be pursued through separate legal actions. In the event of bankruptcy, the bankruptcy administration may initiate compensation claims against the directors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do creditors organize themselves in these proceedings? Are advisory fees covered by the debtor and to what extent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In concordat proceedings, creditors typically act based on their individual claims rather than forming an institutional representation or a collective negotiation structure among themselves. By contrast, in restructuring processes carried out under the Financial Restructuring Framework Agreements , creditors particularly banks and financial institutions are organized under structures such as the Creditors\u2019 Consortium. This consortium works together with professional advisors to ensure that negotiations are conducted efficiently and to assess the restructuring proposals submitted by the debtor from both legal and financial perspectives. Such collective structures also play a key role in ensuring that decisions adopted by majority vote become binding on all creditors.<\/p>\n<p>The allocation of advisory fees varies depending on the nature of the process and the agreement among the parties. In concordat proceedings, creditors generally bear their own advisory costs individually. In contrast, in restructuring processes under Financial Restructuring Framework Agreements, the costs of advisory services are typically borne by the debtor, as the successful completion of the restructuring primarily serves the debtor\u2019s interests. Financial and legal advisors play an active role in analyzing the debtor\u2019s financial situation, developing a feasible and sustainable repayment plan, and building trust among creditors. Accordingly, advisory fees are usually treated as part of the restructuring plan and are generally allocated to the debtor.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the test for insolvency? Is there any obligation on directors or officers of the debtor to open insolvency proceedings upon the debtor becoming distressed or insolvent? Are there any consequences for failure to do so?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish law, bankruptcy is a judicial process that is triggered when a debtor is unable to pay its debts on time and in full. This process is initiated either upon the request of creditors or, in cases specified by law, by the debtor itself, and aims to liquidate the debtor\u2019s assets and distribute the proceeds equally among creditors. When the debtor is in financial distress or its assets are insufficient to cover its liabilities, bankruptcy becomes an issue upon determination of this situation. In particular, for capital companies, pursuant to Article 376 of the Turkish Commercial Code, if the company becomes over-indebted, the board of directors is obliged to file for bankruptcy once this situation is identified.<\/p>\n<p>Failure by company directors or authorized representatives to fulfill this obligation in a timely manner may give rise to both civil and criminal liability. If creditors suffer losses due to a delay in filing for bankruptcy, the directors may be held personally liable. Furthermore, the deliberate and bad-faith postponement of bankruptcy may lead to sanctions under both the Turkish Commercial Code and the Turkish Criminal Code.<\/p>\n<p>For this reason, it is of utmost importance that directors continuously monitor the company\u2019s financial position and take the necessary legal steps without delay in cases of over-indebtedness or financial distress. Otherwise, both the company and its directors may face serious legal consequences.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What insolvency proceedings are available in the jurisdiction? Does management continue to operate the business and \/ or is the debtor subject to supervision? What roles do the court and other stakeholders play? How long does the process usually take to complete?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Bankruptcy may arise in different forms. The main types of bankruptcy are: bankruptcy following enforcement proceedings, direct bankruptcy, and bankruptcy declared as a result of the failure of a concordat process. Bankruptcy following enforcement proceedings occurs when a creditor initiates enforcement proceedings.In direct bankruptcy, the debtor or a creditor applies directly to the court, asserting that the debtor is insolvent. Additionally, if a concordat process fails, the court may also declare bankruptcy. Furthermore, pursuant to Article 376 of the Turkish Commercial Code, if the liabilities of a capital company exceed its assets (over-indebtedness), the board of directors is obliged to file for bankruptcy.<\/p>\n<p>Once a bankruptcy decision is rendered, the debtor loses the authority to dispose of its assets. All assets are collected under what is called the \u201cbankruptcy estate. From this point on, the debtor can no longer manage the company; authority passes to the bankruptcy administration. The bankruptcy administration, composed of persons elected by the creditors, carries out the liquidation of the debtor\u2019s assets.<\/p>\n<p>During this process, the debtor is required to cooperate with the bankruptcy administration, provide financial statements, books and records, and give information when necessary. If it is determined that the debtor caused the bankruptcy through fault or negligence, criminal sanctions may also apply. In the bankruptcy process, the court is responsible for making key decisions regarding the initiation, conduct, and conclusion of the process, and also supervises preliminary procedures such as concordat. Enforcement offices are responsible for implementing the proceedings and handling technical aspects. Creditors play an active role both as claimants and in the formation of the bankruptcy administration. In concordat proceedings, court-appointed commissioners supervise the debtor\u2019s activities.<\/p>\n<p>The duration of the bankruptcy process varies depending on the specific case. In simpler cases, the process is typically completed within 2 to 3 years, whereas in more complex and multi-party cases, it may take between 5 and 8 years. Therefore, bankruptcy is a comprehensive and complex legal process involving multiple parties, including the debtor, creditors, the court, enforcement offices, and the bankruptcy administration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What form of stay or moratorium applies in insolvency proceedings against the continuation of legal proceedings or the enforcement of creditors\u2019 claims? Does that stay or moratorium have extraterritorial effect? In what circumstances may creditors benefit from any exceptions to such stay or moratorium?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>During bankruptcy proceedings, certain actions are suspended in order to protect the debtor\u2019s assets and ensure equal treatment among creditors. In this context, pursuant to Article 193 of the Enforcement and Bankruptcy Law, once bankruptcy is declared, all enforcement proceedings initiated against the debtor are halted, and no new proceedings may be initiated. In addition, any prior attachment or enforcement measures concerning the debtor\u2019s assets automatically cease. This situation is commonly referred to as a \u201cstay of proceedings.\u201d Its purpose is to prevent the fragmentation of the debtor\u2019s assets and to ensure that liquidation is carried out in an orderly and controlled manner. As a general rule, this stay of proceedings is effective only within Turkey. For a bankruptcy decision to have effect abroad, it must be recognized by foreign jurisdictions. In other words, its impact on assets located abroad depends on whether the relevant country\u2019s legal system recognizes the decision. If the necessary recognition and enforcement procedures are completed, the effects of the stay may extend across borders.<\/p>\n<p>However, there are certain exceptions to the stay. In particular, creditors holding secured claims may directly request the realization of the pledged assets.<\/p>\n<p>Furthermore, certain transactions necessary for preserving assets included in the bankruptcy estate or for maintaining business operations may continue with the approval of the court or the bankruptcy administration.<\/p>\n<p>In conclusion, bankruptcy primarily aims to protect the debtor\u2019s assets and ensure an orderly liquidation process. Nevertheless, some creditors especially secured creditors retain, to a certain extent, the ability to recover their claims. In this respect, the system functions as a balance between protecting the debtor and safeguarding the rights of creditors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do the creditors, and more generally any affected parties, proceed in such proceedings? What are the requirements and forms governing the adoption of any reorganisation plan (if any)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish law, creditors are required to comply with certain procedural and formal requirements in order to assert and safeguard their rights within the bankruptcy estate. Following the declaration of bankruptcy, creditors must first submit their claims to the bankruptcy administration in writing. Such notification must specify the amount of the claim, its legal basis, and any security attached thereto. The bankruptcy administration examines the submitted claims and decides whether to accept or reject them; creditors whose claims are rejected may challenge this decision by filing a complaint before the commercial court. Creditors do not remain passive participants in this process; by attending creditors\u2019 meetings, they may directly influence the proceedings by voting on matters such as the appointment of the bankruptcy administration, liquidation methods, and other significant decisions.<\/p>\n<p>In addition, specific protection mechanisms exist for certain groups affected by the bankruptcy, such as employees, secured creditors, and public authorities. For instance, employee claims enjoy a certain level of priority and are satisfied preferentially from the bankruptcy estate. Accordingly, in bankruptcy and potential restructuring processes, creditors not only pursue their individual claims but also have the opportunity to shape the debtor\u2019s financial future through collective decision-making mechanisms. In this respect, Turkish bankruptcy law establishes a multi-party system that seeks to protect creditors\u2019 interests while ensuring an orderly and balanced liquidation process.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do creditors and other stakeholders rank on an insolvency of a debtor? Do any stakeholders enjoy particular priority (e.g. employees, pension liabilities, DIP financing)? Could the claims of any class of creditor be subordinated (e.g. recognition of subordination agreement)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish bankruptcy law, the order in which creditors\u2019 claims against the bankruptcy estate are satisfied is governed by a clear priority system. This system is set forth in Article 206 of the Enforcement and Bankruptcy Code, and creditors are classified into different classes based on their status. During the liquidation process, expenses necessary for the administration and liquidation of the bankruptcy are satisfied first. Following the payment of these expenses, first-, second-, and third-class privileged claims are included in the liquidation process in the order prescribed by law.<\/p>\n<p>The first priority includes wage claims of employees arising within the last year prior to the date of bankruptcy, severance pay, notice pay, and compensation claims resulting from work-related accidents or occupational diseases. Additionally, social security contribution debts related to employees are also considered under this category. This provision reflects the constitutional approach aimed at protecting employees socially and economically. In the second priority category are the debtor\u2019s alimony obligations arising from family law. In the third category are public claims such as taxes, fees, and duties. All claims not falling under these privileged categories are considered ordinary claims and are distributed equally at the conclusion of the liquidation.<\/p>\n<p>Under Turkish law, \u201cDIP financing\u201d (Debtor-in-Possession financing), which is widely used in certain foreign legal systems to provide priority financing to the debtor during insolvency proceedings, is not expressly regulated by statute. Nevertheless, it is generally accepted that certain types of financing granted with court approval during a concordat process\u2014aimed at enabling the debtor to continue its operations\u2014may in practice receive de facto priority treatment.<\/p>\n<p>On the other hand, contractual subordination agreements, which provide that certain claims rank below others in priority, are not expressly regulated under Turkish law. However, it is accepted that such agreements, if validly concluded between the parties, may be taken into account during the liquidation process and may affect the ranking of claims, subject to the general principles of the law of obligations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a debtor\u2019s pre-insolvency transactions be challenged? If so, by whom, when and on what grounds? What is the effect of a successful challenge and how are the rights of third parties impacted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Certain legal transactions carried out by the debtor prior to bankruptcy may be set aside if they result in prejudice to the creditors. This matter is safeguarded through the action for avoidance of fraudulent conveyances regulated under Articles 277 to 284 of the Enforcement and Bankruptcy Law. Such action targets transactions executed by the debtor, prior to the declaration of bankruptcy or before the initiation of enforcement proceedings through attachment, with the purpose of diminishing the debtor&#8217;s assets, concealing assets from creditors, or conferring an advantage upon certain creditors over others. The principal objective of this action is to restore the assets improperly removed from the debtor&#8217;s estate to the bankruptcy estate and to ensure equality among creditors.<\/p>\n<p>An avoidance for avoidance of fraudulent conveyances may be brought by creditors, the bankruptcy administration, or creditors pursuing enforcement proceedings through attachment. Such action must be filed within two years from the commencement of bankruptcy proceedings or from the date on which the attachment becomes final. Transactions that may be subject to avoidance include gratuitous transfers, transactions through which the debtor disposes of a substantial portion of his or her assets, sales made to close relatives at a price significantly below their fair market value, and collusive transactions intended to conceal assets from creditors. In order for such transactions to be annulled, it must be established that the debtor acted in bad faith or that the transaction produced consequences detrimental to the creditors.<\/p>\n<p>If an action for avoidance of fraudulent conveyances is upheld, the transaction, although concluded between the debtor and a third party, shall have no effect vis-\u00e0-vis the bankruptcy estate. In such a case, the asset or right subject to the impugned transaction shall be restored to the bankruptcy estate, or the third party may be required to compensate the estate by making payment of its value. However, the good faith of the third party is of particular significance in this respect. Where the third party neither knew nor could reasonably have been expected to know of the debtor&#8217;s financial condition, such third party may, to a certain extent, benefit from legal protection. Conversely, third parties acting in bad faith are required to bear the full legal consequences of the avoidance action.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are existing contracts treated in restructuring and insolvency processes? Are the parties obliged to continue to perform their obligations? Will termination, retention of title and set-off provisions in these contracts remain enforceable? Is there any ability for either party to disclaim the contract?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Upon the opening of bankruptcy proceedings, the debtor&#8217;s authority to dispose of his or her assets ceases; therefore, the performance of contractual obligations and the continuation of reciprocal performances are, as a general rule, left to the discretion of the bankruptcy administration. Pursuant to Article 195 of the Enforcement and Bankruptcy Law, the bankruptcy estate shall determine whether reciprocal contracts concluded by the debtor prior to bankruptcy are to be performed. Where the bankruptcy administration considers that the performance of the contract is in the best interests of the creditors, it may permit the continuation of the contract; otherwise, it may elect to terminate the contract. In such case, the counterparty shall have the right to claim damages; however, such claim shall be registered against the bankruptcy estate as an ordinary unsecured claim.<\/p>\n<p>Contractual termination clauses, retention of title provisions, and the right of set-off are also affected by bankruptcy proceedings. In particular, where a retention of title clause is valid, the seller is entitled to reclaim the goods; however, such right may not be exercised through direct repossession but rather by filing a claim with the bankruptcy estate. Pursuant to Article 200 of the Enforcement and Bankruptcy Law, the right of set-off may be exercised only in respect of mutual debts existing prior to the date of bankruptcy. Claims arising after the commencement of bankruptcy proceedings are, by contrast, subject to certain restrictions with regard to set-off.<\/p>\n<p>The situation is different in concordat proceedings. Interim respite and definitive respite decisions issued by the court contain provisions restricting the arbitrary termination of contracts to which the debtor is a party. In this context, the termination of a contract is, in most cases, not possible without the consent of the concordat commissioner. This constitutes a significant exception to the principle of freedom of contract. Nevertheless, under certain circumstances\u2014such as where performance has become excessively burdensome or financially unsustainable\u2014the debtor may, with the approval of the concordat commissioner or the court, terminate or suspend the contract.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What conditions apply to the sale of assets \/ the entire business in a restructuring or insolvency process? Does the purchaser acquire the assets \u201cfree and clear\u201d of claims and liabilities? Can security be released without creditor consent? Is credit bidding permitted? Are pre-packaged sales possible?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish law, the transfer of assets or the business belonging to the debtor in restructuring or bankruptcy proceedings is subject to specific procedures and conditions. In the event of bankruptcy, sale transactions are conducted by the bankruptcy administration pursuant to Articles 241 et seq. of the Enforcement and Bankruptcy Law and are, as a general rule, carried out through public auction.<\/p>\n<p>However, a sale by way of negotiated procedure is also possible upon resolution of the creditors\u2019 meeting. The fact that the sale is subject to judicial review ensures the transparency of the process while also safeguarding equality among creditors. In particular, the sale of the enterprise as a going concern is often preferred, as it generally allows for the realization of a higher economic value.<\/p>\n<p>One of the key issues in asset sales is whether the purchaser acquires the assets free and clear of debts and prior obligations. In bankruptcy sales, assets are generally transferred to the buyer free of prior liabilities. However, where in rem security interests such as pledges exist over immovable or movable property, such rights attach to the sale proceeds. In other words, the security interest is not extinguished; the secured creditor satisfies its claim from the sale proceeds, while the asset is acquired by the new owner free and clear of encumbrances. Nevertheless, it is not possible to remove the security interest without the consent of the secured creditor; such interference may only be effected with the creditor\u2019s express consent or by a court order.<\/p>\n<p>In concordat proceedings, although the debtor is, in principle, permitted to obtain new financing, this possibility is considerably limited. Credit necessary for the continuation of the debtor\u2019s operations may be obtained with the approval of both the court and the concordat commissioner; however, in practice, this option is not effectively utilized due to existing uncertainties and the risks it poses for potential financiers.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What duties and liabilities should directors and officers be mindful of when managing a distressed debtor? What are the consequences of breach of duty? Is there any scope for other parties (e.g. director, partner, shareholder, lender) to incur liability for the debts of an insolvent debtor and if so can they be covered by insurances?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the process of managing a financially distressed debtor, company directors and other responsible persons are subject to significant legal obligations under both the Turkish Commercial Code and the Enforcement and Bankruptcy Law. In the event of deterioration in the company\u2019s financial position or the emergence of insolvency, directors are required to act with due care and diligence, taking into account the interests of both the company and its creditors. Indeed, Articles 375 and 376 of the Turkish Commercial Code impose on the board of directors the duty to monitor the company\u2019s financial status, take necessary measures, and, in the event of balance-sheet insolvency, apply to the court and request the opening of bankruptcy proceedings. The breach of these obligations may give rise to personal liability of the directors and compensation claims brought by creditors.<\/p>\n<p>Directors\u2019 failure to fulfil their duties or negligent conduct that drives the company into insolvency may give rise to liability for damages towards both shareholders and creditors. In addition, intentional or grossly negligent acts or transactions that reduce the debtor\u2019s assets or result in harm to creditors may also trigger criminal liability. Furthermore, with respect to tax and social security debts, legal representatives may be held personally liable under the relevant legislation, and direct enforcement proceedings may be initiated against them for such obligations. Shareholders and equity holders may also incur liability in certain circumstances. In particular, where capital contribution obligations are not fulfilled or transactions are carried out in a manner that adversely affects the company\u2019s financial position, creditors may pursue claims against these persons. Moreover, where the bad faith or manipulative conduct of credit institutions providing financing to the debtor company is proven, such institutions may also be held liable.<\/p>\n<p>In response to these risks, many companies in practice resort to Directors and Officers Liability Insurance (D&amp;O insurance). Such insurance policies provide a certain level of coverage for the legal and financial liabilities that may arise from directors\u2019 performance of their duties. However, since circumstances such as intent, fraud, or gross negligence are generally excluded from coverage, it is of critical importance that directors fulfil their legal obligations carefully and in a timely manner.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do restructuring or insolvency proceedings have the effect of releasing directors and other stakeholders from liability for previous actions and decisions? In which context could the liability of the directors be sought?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish law, restructuring or insolvency proceedings do not have an automatic exculpatory effect for directors and other stakeholders in respect of legal liabilities arising from their past acts and decisions. The opening of bankruptcy proceedings or the commencement of concordat proceedings does not eliminate the consequences of breaches of duty committed by directors in the course of performing their functions; such proceedings are primarily aimed at reorganising the company\u2019s financial structure or liquidating its assets. Accordingly, directors continue to bear liability towards both the company and its creditors for transactions and decisions made prior to such proceedings.<\/p>\n<p>Directors\u2019 liability arises primarily under the Turkish Commercial Code, as well as the Enforcement and Bankruptcy Law, the Tax Procedure Law, social security legislation, and other relevant regulations. Pursuant to Article 553 of the Turkish Commercial Code, members of the board of directors and managers are obliged to compensate for any damage they cause to the company, shareholders, or creditors through culpable conduct. In particular, in cases of balance-sheet insolvency (Article 376 of the Turkish Commercial Code), failure to timely apply for bankruptcy, transactions that prejudice creditors, or misuse of company assets may give rise to personal liability of directors. Furthermore, acts such as fraudulent bankruptcy, asset concealment, or making false statements may also entail criminal liability.<\/p>\n<p>Similarly, in concordat proceedings, the directors of the debtor company may incur both civil and criminal liability if they conceal the financial situation, provide false information, or engage in transactions intended to mislead creditors. Such liabilities are not extinguished by the approval or court confirmation of the concordat plan. Indeed, the reports of the concordat commissioner and the court\u2019s supervisory role also allow for the examination of the directors\u2019 past activities.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Will a local court recognise foreign restructuring or insolvency proceedings over a local debtor? What is the process and test for achieving such recognition? Does recognition depend on the COMI of the debtor and\/or the governing law of the debt to be compromised? Has the UNCITRAL Model Law on Cross Border Insolvency or the UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments been adopted or is it under consideration in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish law, restructuring or insolvency proceedings initiated in a foreign country do not produce direct legal effects in T\u00fcrkiye. In order for such proceedings to have legal force and effect in T\u00fcrkiye, they must undergo recognition and enforcement procedures. Recognition and enforcement are regulated under the Law on Private International Law and International Civil Procedure No. 5718 (PIL Code), and the validity of foreign court decisions in T\u00fcrkiye is subject to the fulfilment of certain conditions. In this context, the finality of the decision, its \u0639\u062f\u0645 manifest incompatibility with Turkish public policy, and the existence of reciprocity constitute the main requirements.<\/p>\n<p>When assessing applications for recognition, domestic courts particularly take into account the debtor\u2019s economic and legal connections with T\u00fcrkiye, the debtor\u2019s assets located in T\u00fcrkiye, and the nature of the foreign judgment. While the location of the debtor\u2019s centre of main interests (COMI) abroad constitutes a factor supporting the jurisdiction of the foreign court, it is not, on its own, sufficient for recognition. The decisive considerations are whether the decision was rendered in due procedural form and whether it produces effects that are not contrary to Turkish public policy. Indeed, decisions that violate creditors\u2019 rights of defence or have been obtained through fraud cannot be recognised.<\/p>\n<p>T\u00fcrkiye\u2019s failure to incorporate the UNCITRAL Model Laws on cross-border insolvency into its domestic legal system indicates the adoption of a more cautious and traditional approach in this field. Nevertheless, in practice, applications for the recognition of foreign insolvency judgmentsparticularly before commercial courts have increased, and such requests are assessed within the framework of the provisions of the Law on Private International Law and International Civil Procedure (PIL Code) No. 5718.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">For EU countries only: Have there been any challenges to the recognition of English proceedings in your jurisdiction following the Brexit implementation date? If yes, please provide details.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>N\/A<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can debtors incorporated elsewhere enter into restructuring or insolvency proceedings in the jurisdiction? What are the eligibility requirements? Are there any restrictions? Which country does your jurisdiction have the most cross-border problems with?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish law, legal entities whose registered office or principal place of business is located abroad may, under certain conditions, apply for insolvency or restructuring proceedings in T\u00fcrkiye (such as concordat). However, such applications are subject to jurisdictional and connecting factors laid down in the Enforcement and Bankruptcy Law and the Law on Private International Law and International Civil Procedure (PIL Code No. 5718). In this context, for the bankruptcy of a foreign debtor to be requested in T\u00fcrkiye, the debtor must have a place of business, branch, assets, or commercial activity in T\u00fcrkiye.<\/p>\n<p>Similarly, with respect to concordat and other restructuring applications, the existence of an economic or legal connection between the debtor and T\u00fcrkiye is of particular importance. In particular, the presence of creditors in T\u00fcrkiye, the conduct of commercial activities, or the ownership of assets in T\u00fcrkiye constitute key connecting factors establishing the jurisdiction of Turkish courts.<\/p>\n<p>In this context, among the jurisdictions where cross-border insolvency and restructuring disputes are most frequently encountered, European countries such as Germany, the Netherlands, Switzerland, and the United Kingdom each maintaining intensive economic relations with T\u00fcrkiye stand out. Financial difficulties faced by companies established in these countries but operating branches in T\u00fcrkiye or engaging in commercial relations therein may prompt Turkish creditors to bring actions before domestic courts. In addition, in recent years, a similar increase in cross-border insolvency and restructuring proceedings has been observed in disputes involving companies based in Gulf countries, where capital flows have intensified, as well as in the United States.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are groups of companies treated on the restructuring or insolvency of one or more members of that group? Is there scope for cooperation between office holders? For EU countries only: Have there been any changes in the consideration granted to groups of companies following the transposition of Directive 2019\/1023?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Turkish law, although insolvency or restructuring processes involving corporate groups often require a consolidated assessment in practice, the current legislation treats each legal entity as a separate debtor, and proceedings are conducted independently for each company. While the Turkish Commercial Code contains certain provisions defining corporate groups, it does not provide any specific framework allowing group companies to be addressed in a unified manner in collective debt distress situations such as bankruptcy or concordat proceedings.<\/p>\n<p>This situation, in particular, results in economically highly integrated corporate groups being subjected, in times of crisis, to fragmented and uncoordinated legal proceedings, thereby undermining the effectiveness of an efficient restructuring process.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your country considering adoption of the UNCITRAL Model Law on Enterprise Group Insolvency?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>T\u00fcrkiye has not yet incorporated the UNCITRAL Model Law on Enterprise Group Insolvency (MLEGI) into its domestic legal system, and there is currently no specific legislative framework or concrete draft reform in this area in force. In light of available data, there is also no indication of an explicit policy or preparatory process in T\u00fcrkiye aimed at adopting the said Model Law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any proposed or upcoming changes to the restructuring \/ insolvency regime in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A draft law proposing amendments to the Enforcement and Bankruptcy Law has been published, introducing significant and comprehensive reforms, particularly with respect to the restructuring framework and the concordat regime. The proposed amendments aim to address the existing shortcomings in concordat practice, render the process more efficient, expeditious and predictable, and strengthen the protection afforded to creditors&#8217; rights.<\/p>\n<p>The draft law appears to limit the scope of the current system, which provides debtors with broad and long-term protection throughout the concordat process. To this end, the duration of both the temporary and definitive respite periods is reduced, while courts are granted the discretion to determine shorter periods based on the specific circumstances of each case. These amendments are intended to prevent debtors from remaining under the protection of the respite for extended periods and to avoid unnecessary delays in the proceedings.<\/p>\n<p>The draft also places considerable emphasis on the regulations governing concordat commissioners. The duties, powers and responsibilities of commissioners are defined in greater detail, oversight mechanisms are strengthened, and the sanctions that may be imposed in the event that commissioners fail to duly perform their duties are set out clearly and in a graduated manner. Furthermore, with a view to enhancing the reliability of the financial information submitted in concordat applications, the draft envisages a more effective and comprehensive review of the reports prepared by independent audit firms.<\/p>\n<p>Another significant amendment aimed at protecting creditors is the restriction imposed on the filing of subsequent concordat applications following the rejection of an initial concordat request. Accordingly, a new concordat application may not be submitted unless there has been a substantial change in the financial resources available to satisfy the debtor&#8217;s obligations, or such change can be demonstrated through concrete evidence.<\/p>\n<p>In addition, the draft provides that changes of address made within the six months preceding the application date shall not be taken into account for the purposes of determining jurisdiction. This measure is intended to prevent the abuse of the concordat process through successive applications filed before different courts.<\/p>\n<p>Among the other notable amendments introduced by the draft is the requirement that foreign currency-denominated claims be converted into Turkish lira as of the date of the temporary respite. The draft also mandates that the maturity periods and grace periods envisaged under concordat plans be justified in a reasonable, realistic and transparent manner. Furthermore, in order to ensure the feasibility and success of the concordat plan, the court is granted the authority to require company shareholders, where deemed necessary, to contribute through their personal assets.<\/p>\n<p>In addition, the draft provides that where it becomes evident that the concordat is unlikely to succeed, the concordat application shall be dismissed and, provided that the statutory requirements are met, the debtor may be adjudicated bankrupt. Furthermore, the institution of the trustee, which operates following the confirmation of the concordat and whose practical effectiveness has been subject to debate, is proposed to be replaced by a &#8220;project supervisor&#8221; system entrusted with overseeing the implementation of the concordat plan.<\/p>\n<p>Overall, the proposed amendments seek to transform the concordat regime from an instrument affording debtors virtually unlimited protection into a more balanced framework that better reconciles the interests of both creditors and debtors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your jurisdiction debtor or creditor friendly and was it always the case?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Turkish law has evolved as a system aimed at ensuring a balance of interests between the debtor and the creditor. However, historically, this balance has often been struck in favour of creditors. Although the Enforcement and Bankruptcy Law dated 1926 introduced a more systematic framework from the debtor\u2019s perspective, it has essentially adopted an approach that prioritises the protection of creditors.<\/p>\n<p>Following the legislative amendments carried out after 2003, a new period has begun in which debtor protections are given greater consideration. In particular, the strengthening of the concordat institution has enabled debtors to restructure their debts and continue operations instead of facing bankruptcy. These developments allow debtors to maintain their economic activities, while also enabling creditors to recover their claims within a certain framework, albeit with some delay.<\/p>\n<p>In conclusion, while the Turkish legal system initially had a structure that prioritized creditors, recent reforms have led to a more balanced and equitable reconfiguration of the relationship between debtors and creditors. This transformation reflects a more sustainable approach that enables the restructuring of debtors while also aiming to safeguard the rights of creditors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do sociopolitical factors give additional influence to certain stakeholders in restructurings or insolvencies in the jurisdiction (e.g. pressure around employees or pensions)? What role does the State play in relation to a distressed business (e.g. availability of state support)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Socio-political factors may have direct impacts on certain stakeholders in restructuring and insolvency proceedings. These effects become particularly evident in areas such as social justice, job security, and social security rights. Indeed, employees are among the groups most affected by such processes. In the event of a company\u2019s bankruptcy, employees may face significant risks in relation to wage claims, severance payments, and other employment-related rights. Similarly, the protection of pension obligations and social security rights plays an important role in ensuring both economic and social stability.<\/p>\n<p>The role of the state in these processes is also highly determinative. The state not only establishes the legal framework and supervises the process but may also provide various support mechanisms to debtor companies in order to maintain economic stability. Such support may take the form of incentives, credit facilities, or regulatory measures facilitating restructuring processes. Furthermore, the state contributes to maintaining social balance by taking necessary measures to protect the rights of employees and pensioners.<\/p>\n<p>In this context, the state is not merely an economic regulator but also a public authority that plays a role in ensuring social justice. Socio-political factors, together with the decisions taken by the state in this direction, may generate broad and lasting effects at both the economic and social levels.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the greatest barriers to efficient and effective restructurings and insolvencies in the jurisdiction? Are there any proposals for reform to counter any such barriers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the judicial sphere, the effectiveness of restructuring and insolvency proceedings is often adversely affected by legal, bureaucratic, and economic obstacles, as well as conflicts of interest among stakeholders. In Turkish law, particularly in proceedings conducted under the Enforcement and Bankruptcy Law, legal uncertainties and the increasing workload of courts constitute significant issues. Prolonged litigation periods and delays in decision-making processes make it difficult for debtor companies to continue their operations and weaken the prospects for successful restructuring.<\/p>\n<p>In addition, the debtor\u2019s weak financial structure and conflicts of interest among creditors make the process more complex and protracted. This, in turn, hinders the effective restructuring of debts and leads to delays in the resolution process.<\/p>\n<p>In order to overcome these problems, legal reforms are needed to make the process more predictable and faster. In addition, financial support and incentives provided by the state may enable small and medium-sized enterprises to participate more effectively in restructuring proceedings. The establishment of strong cooperation and communication among stakeholders would also contribute to reducing conflicts of interest and ensuring a more efficient outcome of the process.<\/p>\n<p>Such improvements would serve to strengthen economic stability by safeguarding the interests of both debtors and creditors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">7322<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/143596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=143596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}