Under Article 376 Of The Turkish Commercial Code Technical Bankruptcy

• Introduction

Commonly referred to as “Technical Insolvency,” this concept is regulated under Article 376 of the Turkish Commercial Code (“the Code”) under the heading “Loss of Capital, State of Insolvency.” The provisions of the article define the circumstances of capital loss and insolvency for companies and set forth the procedures to be followed and the measures that may be applied in such cases.

The existence of technical insolvency indicates that a company’s financial structure has been seriously impaired and that a certain portion of its capital has been eroded due to losses incurred. The purpose of this provision is to ensure that necessary measures are taken in a timely manner when a company’s financial condition deteriorates and that the company’s operations are maintained to the extent possible.