GlossaryİİK Art. 289, 294-297 (Enforcement and Bankruptcy Law)
What Is the Definitive Moratorium in Turkish Concordat?
After the temporary moratorium, the court grants the definitive moratorium if it sees a chance that concordat will succeed.
Duration
- The definitive moratorium lasts one year.
- In complex cases it can be extended by up to six months on the commissioner’s report and a reasoned request.
Effects on the company
- Enforcement proceedings: As a rule no new proceedings can be started against the debtor, and existing ones are stayed. Orders for precautionary attachment and injunctions are not enforced.
- Secured claims: Proceedings may be started, but the pledged asset cannot be liquidated.
- Significant transactions: Transferring real estate, granting pledges, giving guarantees and disposing of fixed assets require court permission.
- Operations: The company continues its ordinary business under the commissioner’s supervision.
When the moratorium ends
Within this period the creditors’ meeting is held, the project is put to a vote and the court moves on to its confirmation review.
Frequently asked questions
What is the difference between the temporary and the definitive moratorium?
The temporary moratorium is the initial three-month protection granted right after the application, extendable by up to two months. The definitive moratorium is a one-year period granted on the report of the temporary commissioner if concordat appears likely to succeed.
Can a secured creditor enforce during the definitive moratorium?
A secured creditor may start proceedings, but the pledged asset cannot be sold during the moratorium. Interest accruing in the meantime is covered by the pledge.
This article is for general information only and is not legal advice. Every case must be assessed on its own facts. It reflects Turkish law as of the publication date.