Insolvency Proceedings

Turkish Enforcement and Bankruptcy Law (EBL) governs both individual and collective actions against the estate of debtors. Those aiming to resolve the financial difficulties and reorganize or liquidate a debtor’s assets collectively include following formal proceedings:

Insolvency proceedings can be voluntary or involuntary. There are only slight differences between commencement of insolvency proceedings by the debtor or creditors.

Insolvency proceedings mainly include court ordered or automatic preventive measures to protect both creditor’s rights and debtor’s assets upon commencement of the relevant proceeding.

Participation of creditors are also essential basis in insolvency proceedings giving them sometimes a kind of controlling authority or a supervisory role upon administrators of each relevant proceeding through committees, meetings or individual actions.

Some pre-insolvency events may sometimes trigger certain legal and criminal liabilities against the debtor or its individual directors. Those events may also have some negative effects on on-going formal restructuring proceedings. Therefore it is essentially expected from the debtor being honest and fair to its creditors.

While Türkiye takes territorial approach to bankruptcy law, it applies universality when dealing with the debtor’s estate. In respect to foreign insolvency orders or judgements there is no specific provision in EBL and Turkish courts apply general approach by monitoring the required criterias of enforcement and recognition of foreign judgments.