Debtor Moves Assets to a New Company in Turkey to Avoid Payment: Creditor Remedies (2026 Updated Guide)

A debtor transfers business assets, receivables, inventory or operations to a newly established company in Turkey to avoid creditors. Learn about fraudulent transfer actions, precautionary attachment, enforcement, evidence and recovery strategies.

A creditor may obtain a valid receivable against a Turkish company only to discover that the debtor has transferred its inventory, machinery, vehicles, customer contracts, receivables or entire commercial activity to a newly established company. The original company may then appear to have no meaningful assets while the new company continues essentially the same business. Such restructuring does not automatically make the new company liable for every debt of the former company, but Turkish law provides creditors with several potential remedies where transactions are designed or structured to frustrate collection. Depending on the facts, the creditor may consider enforcement proceedings, precautionary attachment, an action for annulment of fraudulent dispositions, claims concerning business transfers, third-party attachment mechanisms and other civil or commercial remedies. The critical issue is to investigate the asset movement quickly and preserve evidence before the structure becomes more complicated.

Why Do Debtors Move Assets to a New Company?

A financially distressed company may legitimately sell assets, restructure operations or transfer a business. Not every transfer is fraudulent. The legal risk increases, however, where valuable assets leave the debtor without equivalent consideration, transactions involve shareholders or related parties, the original company becomes effectively judgment-proof, and the same individuals continue operating the business through a newly established entity.

The creditor should therefore examine the economic substance of the transaction rather than relying solely on corporate registration records.

A New Company Does Not Automatically Erase the Old Debt

Establishing another legal entity does not by itself extinguish liabilities already owed by the original debtor. The creditor can continue pursuing the original company unless the debt has legally terminated or been transferred under an arrangement binding on the creditor.

The practical problem is usually not the existence of the receivable but the disappearance of attachable assets.

Start With a Detailed Asset Investigation

Before choosing litigation, determine what happened to the debtor’s assets. Identify bank accounts, vehicles, real estate, machinery, inventory, receivables, company shares and other economic rights where legally discoverable.

Then compare the debtor’s historical assets with its current position.

Investigate the New Company

The new entity’s incorporation date, shareholders, directors, address, business activity and corporate changes can provide important clues.

Particular attention should be given to connections between the old and new companies.

Same Shareholders Can Be Important Evidence

If the debtor company’s shareholders establish another company and transfer valuable assets to it shortly before or during enforcement proceedings, the relationship can become highly relevant.

However, common ownership alone does not automatically make the second company responsible for the first company’s debts.

Same Directors Should Also Be Examined

Management continuity can strengthen evidence of economic connection. Determine whether the same individuals control bank authority, customer relationships, purchasing and daily operations.

The complete commercial picture matters more than any single factor.

Same Address Can Support the Investigation

If the new company operates from the debtor’s former premises, this should be documented. The same warehouse, factory, telephone numbers, employees, website, equipment and customer base may collectively indicate continuity of operations.

None of these factors should be treated as automatically conclusive in isolation.

Follow the Machinery and Equipment

For manufacturing businesses, machinery can be among the most valuable assets. Determine whether equipment was sold, leased, transferred or simply moved to premises controlled by the new company.

Preserve serial numbers, invoices, photographs and inventory information where available.

Follow the Inventory

A debtor may move finished products or raw materials to another company shortly before attachment. Investigate invoices, warehouse movements, delivery records and accounting entries.

If there was a genuine sale, determine whether the purchase price was actually paid.

Follow the Receivables

Sometimes the most valuable asset is not physical property but customer receivables.

The debtor may instruct customers to make future payments to a newly created company. The creditor should investigate whether receivables were formally assigned or whether new contracts were created to redirect income.

Third-Party Attachment Can Be Important

Turkish enforcement law provides mechanisms for attaching receivables and rights held by third parties. Where the debtor has receivables against customers, banks or other persons, third-party attachment procedures can become a powerful recovery tool.

Timing is particularly important because money may move quickly once the debtor realizes that enforcement is imminent.

Review Bank Movements Where Legally Available

If evidence concerning transfers between the debtor and related companies becomes available through litigation or other lawful procedures, analyze the timing, amount and stated purpose of each transaction.

Unexplained transfers can be highly significant.

Was Fair Value Paid for the Assets?

A legitimate asset sale normally has an identifiable commercial price and payment mechanism.

If machinery worth a substantial amount was transferred to a related company for a nominal amount, the transaction deserves close examination.

Payment on Paper May Not Be Enough

An agreement may state that consideration was paid, but the actual financial movement should be investigated where legally possible.

Circular payments, unexplained set-offs or accounting entries unsupported by real consideration can become relevant evidence.

Fraudulent Disposition Actions Can Protect Creditors

One of the principal remedies under Turkish enforcement law is the action seeking annulment of certain dispositions prejudicing creditors. This mechanism does not necessarily invalidate the transaction against the entire world. Its principal purpose is to allow the successful creditor, within the legal framework, to pursue execution against property affected by the challenged disposition as though that disposition could not be asserted against the creditor.

The statutory requirements must be examined carefully for the particular transaction.

Not Every Asset Transfer Can Be Annulled

The creditor must establish the conditions required by the applicable provisions of the Enforcement and Bankruptcy Law. The nature of the transaction, relationship between the parties, timing, debtor’s financial condition and knowledge of the transferee can all become important.

A creditor should therefore avoid treating every related-party transaction as automatically void.

Gratuitous Transfers Require Particular Attention

Transfers without genuine consideration can create substantial creditor-protection concerns, particularly where they occur while the debtor is financially distressed.

The actual substance of the transaction should be established through documentary evidence.

Related-Party Transactions Can Receive Greater Scrutiny

Transactions involving spouses, relatives, shareholders, directors or economically connected companies may present different evidentiary considerations depending on the legal basis of the claim.

Corporate relationships should be mapped in detail.

Knowledge of the New Company Can Be Important

In certain fraudulent-transfer disputes, whether the transferee knew or should have understood the debtor’s financial circumstances or creditor-prejudicing purpose can become important.

Where the new company is controlled by the same individuals, establishing knowledge may be substantially different from a transaction involving an unrelated purchaser acting in good faith.

Timing Can Reveal the Commercial Purpose

Create a chronology showing when the debt arose, when payment became due, when legal notices were sent, when enforcement began, when the new company was incorporated and when assets were transferred.

A sequence in which restructuring begins immediately after collection pressure can become important evidence.

Precautionary Attachment May Be Critical

If the creditor satisfies the statutory requirements, precautionary attachment may help secure assets before final collection becomes impossible.

Speed matters where there is credible evidence that assets continue to move.

Do Not Wait Until Every Asset Has Disappeared

A creditor who spends months negotiating while the debtor restructures may later face a far more difficult enforcement environment.

Once suspicious asset transfers are discovered, the creditor should simultaneously assess negotiation, enforcement and protective measures.

Can Assets Held by the New Company Be Seized Directly?

Not merely because the creditor believes the companies are connected. Separate legal personality remains important.

The creditor needs an appropriate legal basis for reaching assets legally held by another company. Fraudulent-disposition remedies and other applicable claims may provide such a basis depending on the facts.

Business Transfer Rules May Also Matter

If the transaction is not merely a sale of several isolated assets but effectively a transfer of an entire commercial enterprise or a substantial operating unit, additional rules concerning business transfer and liabilities may need to be examined.

The transaction should therefore be analyzed as a whole.

Look for Continuity of Business Operations

Relevant evidence may include the same premises, equipment, employees, customers, suppliers, trade name elements, telephone numbers, online presence, management and business model.

The more extensive the continuity, the more important it becomes to determine the true legal nature of the restructuring.

Customer Transfers Should Be Investigated

A company may leave its debts behind while directing customers to contract with a newly established related entity.

Review when customers changed contracting parties and whether the new company received business opportunities developed using the debtor’s assets and resources.

Employee Transfers Can Provide Evidence

If virtually all employees move to the new company at the same time as machinery and customers, this may support the factual picture of operational continuity.

Employment transfers alone, however, do not automatically establish liability for unrelated commercial debts.

Accounting Records Can Be Crucial

Invoices, ledgers, asset registers and related-party accounts can help determine whether a genuine commercial transfer occurred.

In litigation, requests for relevant records and expert examination may become necessary.

Expert Examination May Be Required

Complex corporate structures frequently require financial and accounting expertise. An expert may analyze asset values, company records, related-party transactions and payment flows.

Technical experts may also be required to identify machinery or other transferred assets.

Preserve Electronic Evidence

Emails, messages, invoices, website changes and digital corporate announcements can help establish the timeline.

Evidence should be obtained lawfully and preserved in a manner that supports its later use in proceedings.

Public Corporate Records Should Be Preserved

Changes in shareholders, directors, registered addresses and company structure can become relevant. Preserve the records showing how the companies evolved during the disputed period.

Social Media Can Reveal Business Continuity

Public announcements may show that the same factory, team or business is operating under another company.

Such information should be preserved promptly because online content can later be deleted or changed.

What If the Assets Were Transferred Before the Creditor Filed Enforcement?

A transaction does not necessarily become immune merely because it occurred before enforcement proceedings began. The applicable creditor-protection rules contain their own requirements concerning the debt, transaction and relevant statutory periods.

The chronology should therefore be reviewed carefully.

What If the New Company Sells the Assets Again?

Subsequent transfers can complicate recovery significantly. The rights of later transferees and their knowledge may become important depending on the applicable legal mechanism.

This is another reason early protective action can be valuable.

Can the Directors Become Personally Liable?

Company directors or shareholders are not automatically personally liable for every corporate debt simply because the company cannot pay.

However, separate personal liability may arise under particular legal grounds where their own conduct satisfies the requirements of the relevant claim. This should be analyzed independently rather than assumed from the company’s insolvency.

Piercing the Corporate Structure Is Exceptional

The existence of related companies should not lead to the assumption that separate legal personality can simply be ignored.

Arguments based on abuse of legal personality require careful factual and legal analysis and should generally be supported by strong evidence of misuse rather than ordinary group-company relationships.

Criminal Complaints Should Not Replace Civil Enforcement

Some asset-transfer scenarios may raise criminal-law questions depending on the conduct involved, but a criminal complaint should not be used merely as leverage in an ordinary commercial debt dispute.

The creditor should separately evaluate civil, enforcement, commercial and any genuinely applicable criminal-law issues.

Insolvency and Bankruptcy Risks Should Be Reviewed

If the debtor is genuinely insolvent rather than merely hiding assets, bankruptcy or restructuring proceedings may affect the creditor’s strategy.

The creditor should determine whether collective proceedings, individual enforcement or transaction challenges provide the most effective route.

Other Creditors May Be Pursuing the Same Assets

Investigate whether there are existing attachments, pledges, mortgages or other creditor claims.

Priority can materially affect the economic value of enforcement.

Do Not Focus Only on Real Estate

Modern businesses may hold substantial value in bank accounts, receivables, vehicles, inventory, intellectual property, licenses, domain names and shares.

A comprehensive recovery strategy should consider the entire asset structure.

Foreign Creditors Can Pursue Remedies in Turkey

A foreign company holding a claim against a Turkish debtor may potentially pursue Turkish enforcement and litigation remedies subject to jurisdictional, procedural and documentary requirements.

The underlying contract, dispute-resolution clause and existing foreign judgment or arbitral award should be reviewed first.

Review Arbitration and Jurisdiction Clauses

Before commencing proceedings, determine whether the contract requires litigation in a particular court or arbitration forum.

The procedure for establishing the debt and the procedure for securing Turkish assets may involve separate legal questions.

Evidence of Intent Should Be Built From Facts

Direct written evidence saying “transfer the assets so the creditor cannot collect” is rarely available.

Intent or knowledge may instead be inferred from timing, relationships, inadequate consideration, operational continuity and other surrounding circumstances, subject to the applicable evidentiary rules.

Build a Transaction Map

A useful creditor investigation should show:

Old Company → Asset → Transfer Date → New Owner → Consideration → Payment Evidence → Current Location → Relationship Between Parties.

This can reveal patterns that are difficult to see when documents are reviewed separately.

2026 Creditor Strategy

Where a debtor appears to be moving assets to a new company, the creditor should act on several fronts simultaneously: secure the receivable, investigate assets, preserve evidence, identify related companies, examine suspicious transfers and evaluate urgent protective measures.

The creditor’s strongest position generally comes from demonstrating the actual economic movement of assets and business activity, not merely asserting that the two companies look similar.

Frequently Asked Questions

Can a debtor legally establish a new company while owing money?

Yes. Establishing another company is not itself unlawful. The legal problem arises where transactions involving the new entity violate creditor-protection rules or other applicable law.

Is the new company automatically liable for the old company’s debt?

No. Separate legal personality generally applies. Liability requires an appropriate legal basis.

Can transferred assets be reached by creditors?

Potentially. Depending on the facts, fraudulent-disposition proceedings and other enforcement or commercial-law remedies may allow the creditor to pursue assets affected by the transfer.

What if the same person owns both companies?

Common ownership is important evidence but does not automatically merge the companies or their debts.

Can the creditor obtain precautionary attachment?

Potentially, where the statutory conditions are satisfied. It can be particularly important where assets are actively being moved.

What if machinery was sold far below market value?

The transaction should be investigated carefully, including valuation, consideration, payment and the relationship between the parties.

Can customer receivables be attached?

Potentially. Turkish enforcement law provides mechanisms for attaching a debtor’s receivables and rights against third parties.

Can shareholders be personally responsible?

Not automatically. A separate legal basis for personal liability must generally exist.

What evidence is most important?

Corporate records, invoices, asset registers, payment evidence, bank movements where lawfully obtainable, machinery records, customer transfers, accounting information and a detailed chronology can all be important.

What should the creditor do first?

Identify where the value went. Determine which assets, receivables or business operations left the debtor, who received them, what consideration was supposedly paid and whether urgent measures are necessary before further transfers occur.

Client-Focused Legal Support for Asset Transfers and Creditor Recovery

When a debtor transfers machinery, inventory, receivables, vehicles, customer contracts or an operating business to a newly established company, ordinary enforcement against the original debtor may no longer be sufficient. Fırat Fesih Kaya Law Office assists foreign companies, investors and commercial creditors in investigating asset transfers, pursuing enforcement proceedings, evaluating fraudulent-disposition actions, seeking precautionary measures and developing recovery strategies against related corporate structures in Turkey.

Lawyer Fırat Fesih Kaya provides legal assistance in complex creditor disputes involving asset concealment, related companies, business transfers, third-party receivables and enforcement proceedings.

Phone: +90 312 434 22 22

Mobile / WhatsApp: +90 532 769 22 22

Email: info@firatfesihkaya.av.tr

Address: Mevlana Boulevard No:221, Yıldırım Tower, Office No:148, 06520 Balgat, Çankaya, Ankara, Turkey