Konkordato in Türkiye is a court-supervised procedure that lets a debtor who cannot pay its debts as they fall due — or who is under the threat of becoming unable to do so — reach a binding restructuring agreement with its creditors instead of going into bankruptcy. It is governed by Articles 285 to 309 of the Enforcement and Bankruptcy Law (Law No. 2004), whose consolidated text is published on the Presidency’s official legislation database, Mevzuat Bilgi Sistemi. Konkordato was repositioned as Türkiye’s principal company-rescue procedure by Law No. 7101 in 2018, which abolished the earlier deferral-of-bankruptcy mechanism. The application is made to the Commercial Court of First Instance, which grants a temporary moratorium of three months (extendable by up to two) and then, where restructuring appears feasible, a definite moratorium of one year (extendable by up to six months); acceptance turns on the creditor threshold in Article 302.
When a fundamentally viable company runs into a cash crunch, the choice is rarely as simple as pay or fail. Turkish law offers a middle path: konkordato, a court-supervised procedure that lets a distressed debtor renegotiate its debts with creditors and keep operating instead of collapsing into bankruptcy. For companies with real underlying value but a temporary or structural inability to meet their obligations, konkordato is often the decisive tool between rescue and liquidation.
What konkordato is, after the 2018 reform
Konkordato is a collective restructuring procedure conducted under judicial supervision. Its purpose is to allow a debtor to reach a binding arrangement with creditors — typically a reduction of the debts (a haircut), a rescheduling of payments, or a combination of the two — so that the business can continue and creditors recover more than they would in a liquidation.
The current framework is the product of a significant reform. Until 2018, distressed companies mainly relied on deferral of bankruptcy (iflasın ertelenmesi). That mechanism was abolished by Law No. 7101 in 2018, which rewrote the konkordato provisions and repositioned konkordato as the principal rescue procedure in Turkish law. The rules now sit in the Enforcement and Bankruptcy Law (Law No. 2004), Articles 285 to 309. The provisions have been amended since; amending laws are promulgated in the Resmî Gazete, and any application should be prepared against the consolidated text in force at the time of filing.
Broadly, the law contemplates two settings. Ordinary konkordato (adi konkordato) is the restructuring agreement reached with creditors before bankruptcy, and it is by far the most common in practice. Konkordato after bankruptcy allows a debtor who has already been declared bankrupt to propose an arrangement to creditors, terminating the liquidation if it is confirmed.
Konkordato is not a way to escape debts. It is a supervised, collective mechanism to restructure them so that a viable business survives and creditors are paid on a realistic, agreed basis.
Who can apply
The procedure is open to any debtor who is unable to pay debts as they fall due, or who is under the threat of becoming unable to do so. This covers companies of any size as well as individuals carrying on commercial activity. In addition, any creditor who would be entitled to request the debtor’s bankruptcy may itself file for the debtor’s konkordato.
Whoever applies, the file must be built around a preliminary konkordato project (konkordato ön projesi). This document is the heart of the application: it explains how and over what period creditors will be paid, what reduction or rescheduling is proposed, and why the plan is realistic. It must be accompanied by financial statements, a list of assets and liabilities, and the further supporting documents specified in the Enforcement and Bankruptcy Law.
The moratorium mechanism: temporary and definite
The distinctive feature of konkordato is the moratorium (mühlet) — the protected period during which the debtor is shielded from creditor action while the restructuring is worked out. It operates in two stages.
First, on a compliant application, the Commercial Court of First Instance grants a temporary moratorium (geçici mühlet) of three months, which may be extended by up to two months. At the same time, the court appoints a temporary konkordato commissioner (geçici konkordato komiseri) to examine the debtor’s financial position and the feasibility of the project.
If the review shows that the konkordato has a realistic prospect of success, the court grants a definite moratorium (kesin mühlet) of one year, which may be extended by up to six months. Throughout the moratorium, a permanent commissioner supervises the debtor’s affairs.
| Stage | Duration | Extension | Court and officer |
|---|---|---|---|
| Temporary moratorium | 3 months | Up to 2 months | Commercial Court; temporary commissioner |
| Definite moratorium | 1 year | Up to 6 months | Commercial Court; commissioner |
Critically, during the moratorium, enforcement proceedings against the debtor are as a rule suspended under Article 294 of the Enforcement and Bankruptcy Law. No new attachments can be pursued and pending proceedings are stayed, subject to the exceptions the law preserves. This suspension is what gives the company the breathing space to negotiate and implement its plan.
The creditor approval threshold
A konkordato is not imposed on creditors by the court alone; it must secure their support. Creditors are convened, the project is discussed, and they vote. The decisive rule is the approval threshold in Article 302 of the Enforcement and Bankruptcy Law.
The konkordato is accepted if the project is signed by a majority exceeding either:
- half of the registered creditors and half of the total claims; or
- one quarter of the registered creditors and two thirds of the total claims.
Note that in both limbs the statutory word is exceeding (aşan): the proportions must be passed, not merely reached. A vote representing exactly two thirds of the claims under the second limb therefore falls short.
Meeting either of these alternative thresholds carries the project forward to the confirmation stage. The double structure — one route weighted toward the number of creditors, the other toward the value of the claims — is designed to prevent a small number of large creditors, or a large number of small ones, from blocking an otherwise sound plan on their own.
Effects of a confirmed konkordato
Once the creditors’ vote clears the threshold, the court examines the file and, if the statutory conditions are satisfied, confirms (tasdik) the konkordato. Confirmation is what turns the agreement into a binding legal outcome.
A confirmed konkordato binds all creditors whose claims arose before the moratorium — including those who voted against the project and those who did not take part. The principal carve-out is for secured creditors: their claims remain outside the arrangement to the extent they are covered by their security, reflecting the priority that collateral gives them.
Just as importantly, the debtor continues to run the business under the commissioner’s oversight. Konkordato does not dispossess management or hand the enterprise to a liquidator; it keeps the company operating, subject to supervision, while the agreed restructuring is carried out. That continuity is precisely the value of the procedure over bankruptcy.
Practical guidance
The outcome of a konkordato is usually decided long before the creditors’ vote. Three points matter most in practice.
First, the preliminary project and the financial documents carry the case. A credible, well-evidenced plan — realistic cash-flow projections, an honest picture of assets and liabilities, and a coherent repayment structure — is what persuades both the commissioner and the creditors. A thin or optimistic project rarely survives the commissioner’s scrutiny.
Second, timing is decisive. Konkordato works best when it is initiated while the company still has viable operations and negotiating leverage, not after liquidity has fully run out. Applying too late narrows the options and undermines the credibility of any rescue plan.
Third, creditor engagement should begin early. Because approval turns on the Article 302 threshold, understanding the composition of the creditor body — who holds the largest claims, which creditors are secured, and where consensus is achievable — should shape the project from the outset rather than being left to the meeting itself. Structuring the plan around the realities of the creditor pool is often the difference between confirmation and refusal.
