Answer ... The reconstruction methods regulated by the law are as below:
- Bankruptcy
- Adjournment of the Bankruptcy
- Concordat
- Reconstruction of the Corporations by Negotiation
Bankruptcy can be requested by any creditor, while it is necessary to settle with the majority of the creditors for the concordat application.
Bankruptcy and Adjournment of Bankruptcy cost more than the Concordat.
The power of disposition of the debtor will be abolished in bankruptcy while the debtor’s power of disposition remains in force in the concordat.
In case all of the creditors’ receivables cannot be fulfilled by bankruptcy, the creditors will obtain a proof of insolvency. The creditors will be able to initiate enforcement proceedings against the bankrupt through this document, in case the bankrupt will obtain new assets. However, the creditors who are the party of the concordat agreement cannot claim their receivables which are not in the scope of the concordat.
The sanctions to be imposed on the bankrupt under the public law will not be imposed on the debtor who applied to the concordat.
Bankruptcy can be requested only by the merchants while being a merchant is not necessary for requesting concordat.
Again only the corporations and cooperatives can request the bankruptcy adjournment. The court will not consider the consent of the creditor to decide on bankruptcy adjournment. However, the consent of the majority of the creditors who attends the creditors’ meeting should be present for the court to approve the request of the concordat.
Only the debtors who are deep in debt can request the adjournment of the bankruptcy while the debtors who cannot pay their debts in due time or debtors who are under the risk of not being able to pay their debts in due time can request concordat.
The term of the concordat can be 29 months while the adjournment of bankruptcy can be extended up to 5 years.
The debtor does not need to be deep in debt for requesting concordat while the corporations must be deep in debt to request the adjournment of the bankruptcy. Concordat is subjected to strict terms and the attendance of the majority of the creditors is necessary. The attendance of the creditors is not required for the adjournment of the bankruptcy. Adjournment of the bankruptcy enables the debtor to save itself from the financial collapse without the attendance of the creditors.
All creditors of the debtor will be affected by the consequences of ‘temporary term’ and ‘final term’ decisions in the concordat, while the consequences and protectiveness of the reconstruction are only in force for the ‘creditors who are affected by the project’.
Concordat proceedings, including negotiations, proceed under the supervision of the courts while the negotiation of the reconstruction is under the initiative of the debtor and does not proceed under the supervision of the courts.