Can a Foreign Creditor Challenge a Turkish Company’s Concordat Plan? (2026 Updated Guide)

Can a foreign creditor challenge a Turkish company’s concordat plan? Learn about creditor registration, voting, objections, security, court approval, foreign-currency claims and debt recovery rights in Turkey.

A Turkish company entering concordat proceedings can create significant uncertainty for a foreign creditor. The creditor may have unpaid invoices, loans, supply-contract receivables, shareholder loans, service fees or other cross-border claims, while the debtor seeks court protection and proposes a restructuring of its debts. The fact that the creditor is incorporated or resident outside Turkey does not, by itself, mean that the creditor must remain outside the Turkish concordat process. A foreign creditor whose claim is affected should act quickly to establish the debt, monitor the proceedings, examine the proposed payment terms and use available objection and litigation mechanisms where the plan unlawfully or unfairly affects its rights.

What Is Concordat in Turkey?

Concordat is a court-supervised restructuring mechanism through which a debtor experiencing financial difficulty may seek an arrangement with creditors. Depending on the circumstances, the proposal may involve payment over time, reduction of debt or another restructuring permitted by the applicable framework.

The proceeding can materially restrict individual enforcement activity while the debtor attempts to restructure its liabilities.

Can a Foreign Creditor Participate?

Potentially, yes. The nationality or foreign residence of a creditor does not automatically eliminate a valid claim against a Turkish debtor. What matters is the legal nature, existence and treatment of the receivable.

Foreign creditors should therefore avoid assuming that the proceeding concerns only domestic Turkish creditors.

Monitor the Concordat Proceeding Immediately

Once the creditor learns that the debtor has obtained concordat protection, it should identify the competent court, relevant file and procedural stage.

Delay can be dangerous because important creditor actions are governed by procedural periods.

Establish the Exact Amount of the Claim

The foreign creditor should calculate principal, contractual interest and other amounts potentially owed under the underlying transaction.

The amount claimed in the concordat proceeding should be supported by documents rather than a general account balance.

Prepare the Underlying Contract

International supply agreements, loan agreements, distribution contracts, service agreements, purchase orders and amendments should be collected immediately.

If the contract is not in Turkish, translation issues should be addressed early enough to avoid procedural delay.

Invoices Are Important but May Not Be Enough

Commercial invoices can provide significant evidence, but disputed claims may require broader documentation.

Delivery records, acceptance documents, account statements, correspondence, payment records and acknowledgments of debt can strengthen the creditor’s position.

Preserve Delivery Evidence

Where the debt arises from goods supplied to the Turkish company, preserve bills of lading, delivery receipts, warehouse documents, customs records and other evidence showing that the goods were actually delivered.

This becomes particularly important if the debtor later disputes the transaction.

Foreign-Currency Claims Require Special Attention

A foreign creditor may have receivables denominated in euros, dollars, pounds or another currency. The creditor should examine how the claim will be recorded and treated in the concordat process and how exchange-rate issues affect the amount.

Do not assume that the amount appearing in the debtor’s records accurately reflects the foreign-currency exposure.

Check Whether the Debtor Recognizes the Claim

One of the first practical questions is whether the Turkish company accepts the creditor’s receivable and its amount.

A creditor whose claim is fully recognized is in a substantially different procedural position from a creditor whose claim is disputed or omitted.

What If the Claim Is Missing?

The creditor should react promptly if its receivable does not appear correctly in the concordat process. It should gather supporting evidence and use the applicable procedure to assert the debt.

Remaining silent can weaken the creditor’s ability to influence the restructuring.

What If the Debtor Disputes the Debt?

A debtor may challenge the existence or amount of the foreign creditor’s claim. The dispute may concern delivery, defective goods, set-off, payment, contractual interpretation or another issue.

The creditor should separate the underlying contractual dispute from the concordat voting and approval issues.

Can a Disputed Creditor Participate in Voting?

The treatment of disputed claims for voting purposes can require judicial determination under the concordat procedure. The creditor should therefore address the dispute before the voting stage rather than assuming that the full amount will automatically be counted.

Why Is Voting Important?

Creditor voting is central to the concordat process because the proposal must satisfy the statutory majority framework applicable to approval.

A substantial foreign creditor may therefore have meaningful influence over whether the proposed restructuring obtains sufficient creditor support.

Should a Foreign Creditor Automatically Vote Against the Plan?

Not necessarily. The commercial value of the proposal should be assessed.

A realistic restructuring that preserves a viable debtor may produce a better recovery than an unsuccessful restructuring followed by insolvency. Conversely, a plan that transfers disproportionate risk to creditors may justify opposition.

Analyze the Proposed Payment Schedule

Examine when payments begin, how long the repayment period lasts, whether installments increase over time and what happens if the debtor defaults again.

A promise to pay eventually is not enough. The plan should be evaluated against the company’s realistic cash-generating capacity.

Examine Any Proposed Debt Reduction

If the concordat proposes payment of only part of the debt, calculate the actual economic loss.

The creditor should also consider inflation, currency movements and the time value of delayed payments.

Compare the Plan With the Insolvency Alternative

A central commercial question is what the creditor is likely to recover if the restructuring fails.

The creditor should therefore compare the proposed concordat recovery with the potential recovery under liquidation or other enforcement scenarios.

Examine the Debtor’s Financial Information

Review available balance-sheet information, income, liabilities, receivables, inventory, fixed assets and cash-flow projections.

A restructuring plan should be supported by credible financial assumptions.

Challenge Unrealistic Revenue Projections

If the proposal depends on extraordinary future sales, rapid asset disposals or financing that has not been secured, the creditor should question those assumptions.

The feasibility of the plan can become important during court review.

Investigate Related-Party Transactions

Foreign creditors should examine whether assets, funds or business opportunities have been transferred to shareholders, directors or related companies before or during financial distress.

Suspicious transactions may create separate legal issues beyond the concordat vote itself.

Check Whether Assets Were Transferred Before Concordat

If valuable property disappeared from the debtor shortly before the proceeding, collect available corporate, commercial and payment evidence.

Depending on the facts, separate avoidance or liability remedies may require consideration.

Review Shareholder and Group-Company Receivables

A debtor may owe substantial amounts to shareholders or affiliated companies. The creditor should understand how related-party claims affect voting, financial projections and the proposed distribution of value.

Secured and Unsecured Claims Must Be Distinguished

A creditor holding security should not automatically analyze its position in the same manner as an ordinary unsecured supplier.

Mortgages, pledges, guarantees and other security arrangements should be reviewed separately.

Review Bank Guarantees and Third-Party Guarantees

The Turkish debtor may not be the creditor’s only source of recovery.

If a bank, shareholder, parent company or another party guaranteed the obligation, determine whether enforcement against that guarantor remains available and how the concordat affects the particular arrangement.

Parent-Company Guarantees Can Be Valuable

Where a foreign supplier obtained a guarantee from the Turkish company’s parent or shareholder, review its wording carefully.

The debtor’s concordat does not necessarily mean that every independent third-party obligation disappears.

Check Retention-of-Title Clauses

International supply contracts sometimes contain retention-of-title provisions. Their effectiveness should be evaluated under the applicable law and the circumstances of the transaction rather than assumed.

Set-Off Rights May Be Important

If the foreign creditor also owes money to the Turkish company, set-off may become commercially significant.

The existence and exercise of set-off rights should be examined carefully in light of the concordat proceeding and underlying contractual relationships.

Existing Enforcement Proceedings May Be Affected

Concordat protection can materially affect individual enforcement proceedings against the debtor.

A foreign creditor that already initiated debt collection should determine immediately what effect the concordat decision has on its pending enforcement file.

Do Not Start Enforcement Without Checking the Concordat Status

Attempting ordinary enforcement without understanding the current court protection may waste time and costs.

The creditor should first determine the exact scope and duration of the concordat measures.

Can the Foreign Creditor Challenge the Concordat Plan?

Yes, depending on its procedural position and the grounds relied upon. A creditor may raise objections concerning statutory approval requirements, treatment of claims, creditor majorities, feasibility or other defects relevant to judicial confirmation.

The challenge should focus on legally significant deficiencies rather than merely stating that the creditor dislikes the commercial terms.

Court Confirmation Is Critical

Creditor approval alone does not necessarily end the process. The concordat becomes subject to judicial examination under the applicable statutory requirements.

This gives affected creditors an important opportunity to raise legally relevant objections.

Challenge Incorrect Creditor Calculations

If the debtor or concordat process uses an incorrect claim amount, the creditor should document the error.

Incorrect claim values can affect both the creditor’s economic recovery and calculations concerning voting majorities.

Examine Whether Required Majorities Were Properly Calculated

Where the validity of the vote is disputed, analyze which creditors and receivables were included and how the required statutory majorities were calculated.

Related-party or disputed claims can make this analysis particularly important.

Feasibility Can Be Challenged

A concordat should not be treated as credible merely because a spreadsheet shows future payments.

The creditor may challenge assumptions concerning revenue, financing, asset sales, profitability or other elements where the evidence does not support them.

Unequal Treatment Requires Careful Review

If certain creditors appear to receive materially more favorable treatment, determine the legal basis for the difference.

Not every distinction is unlawful because secured status and other legal characteristics can justify different treatment, but unexplained preferential treatment should be examined.

Watch for Hidden Side Agreements

A creditor should investigate whether certain creditors have been promised benefits outside the formal plan.

Evidence of undisclosed arrangements may raise serious concerns about the integrity of the restructuring.

Can a Foreign Creditor Attend Through a Lawyer?

A foreign company can generally protect its interests in Turkish proceedings through appropriately authorized Turkish counsel.

The necessary power-of-attorney and corporate authorization documents should be prepared promptly.

Foreign Corporate Documents May Require Formalities

Depending on their origin and intended use, corporate documents and powers of attorney may require notarization, legalization, apostille or translation.

These formalities should not be left until immediately before a procedural deadline.

Preserve Emails and Electronic Evidence

Commercial disputes increasingly depend on email, messaging platforms and electronic accounting records.

Preserve communications acknowledging the debt, discussing delayed payments or proposing restructuring.

Admissions by the Debtor Can Be Important

Messages in which company directors acknowledge the amount owed or request additional time can become valuable evidence if the debt is later disputed.

Preserve the complete conversation rather than isolated screenshots where possible.

Examine the Debtor’s Conduct During the Protection Period

The creditor should monitor whether the debtor continues operating in accordance with the restructuring process and whether significant asset movements occur.

Unusual transactions should be documented promptly.

Can the Creditor Challenge Court Confirmation?

Available remedies depend on the final decision, the creditor’s procedural status and the applicable enforcement and bankruptcy rules. Any challenge must be assessed immediately because procedural deadlines may be short.

The creditor should not wait until the plan begins to be implemented before seeking advice about a disputed confirmation decision.

What If the Debtor Fails to Perform the Approved Concordat?

An approved restructuring does not give the debtor unlimited freedom to ignore its obligations.

If the company fails to perform according to the approved terms, affected creditors should examine the remedies available under the applicable concordat framework and the specific nature of the breach.

Foreign Judgment or Arbitration Award Creditors

A foreign creditor may already possess a foreign court judgment or arbitral award against the Turkish company.

The effect and enforcement of that decision in Turkey should be analyzed together with the concordat proceeding, including any recognition or enforcement requirements that may apply.

Arbitration Clauses Should Not Be Ignored

If the underlying debt is disputed and the contract contains an arbitration clause, determine which forum has jurisdiction to decide the substantive contractual dispute.

The concordat court and the tribunal deciding the underlying claim may perform different functions.

Review Governing-Law Clauses

International contracts frequently select foreign law.

That clause may govern substantive contractual questions, while Turkish insolvency and concordat rules can still become relevant to the restructuring of a Turkish debtor.

Consider Contractual Claims Against Other Parties

If the debtor cannot pay, investigate whether directors, shareholders, guarantors, insurers, banks or other contractual parties may bear separate obligations.

Concordat strategy should not focus exclusively on the debtor where additional recovery sources exist.

Keep Commercial Negotiations Separate From Procedural Protection

A creditor can negotiate while simultaneously preserving legal rights.

Do not allow promises such as “we will pay you after the concordat is approved” to cause the company to miss a procedural deadline.

Build a Foreign Creditor File

The creditor’s file should contain the underlying contract, invoices, delivery documents, payment history, account statements, correspondence, guarantees, security documents, corporate authorization documents and all concordat notices.

A well-organized file makes rapid action possible.

Immediate Action Plan for Foreign Creditors

When a Turkish customer or borrower enters concordat, the foreign creditor should immediately identify the court proceeding and procedural stage, calculate and document its claim, determine whether the debt is recognized or disputed, examine security and guarantees, review the restructuring proposal, monitor voting rights, investigate the debtor’s financial projections and related-party transactions, protect objection rights and prepare for judicial confirmation proceedings.

Frequently Asked Questions

Can a foreign company be a creditor in a Turkish concordat?

Yes. Foreign status alone does not prevent a creditor from asserting a valid receivable against a Turkish company.

Can a foreign creditor vote on the concordat proposal?

Potentially, subject to the treatment and status of its claim under the applicable concordat procedure.

What if the Turkish company disputes the foreign creditor’s invoice?

The creditor should submit supporting contractual, delivery and payment evidence and evaluate the procedure applicable to disputed claims.

Can the creditor reject the payment plan?

A creditor can oppose the proposal, but whether the concordat ultimately becomes binding depends on the statutory voting and judicial confirmation framework.

Can a foreign creditor challenge court approval?

Potentially, depending on its procedural position, the grounds for challenge and applicable procedural requirements.

Does concordat eliminate a bank guarantee?

Not automatically. Independent guarantees and other third-party obligations should be examined according to their own terms and legal characteristics.

What happens to existing enforcement proceedings?

Concordat measures can significantly restrict enforcement against the debtor. The specific effect on the creditor’s enforcement file should be reviewed immediately.

Can foreign-currency debts be claimed?

Foreign-currency receivables can raise particular calculation and procedural issues. The creditor should verify how its claim is recorded and treated in the proceeding.

What if the debtor transfers assets to related companies?

Potentially suspicious transfers should be documented and evaluated for separate legal remedies, depending on the timing, parties and nature of the transaction.

What should a foreign creditor do first?

Identify the concordat proceeding immediately and establish the claim with complete evidence. The creditor should not wait for the final approval hearing before checking whether its receivable, voting rights, security and objections have been properly protected.

Legal Support for Foreign Creditors in Turkish Concordat Proceedings

A Turkish company’s concordat can expose foreign creditors to payment reductions, extended maturities, disputed receivables, suspended enforcement, voting disputes and substantial cross-border recovery risks. Fırat Fesih Kaya Law Office assists foreign companies, international suppliers, lenders and investors seeking to protect receivables in Turkish concordat and insolvency proceedings. Lawyer Fırat Fesih Kaya provides legal assistance in asserting foreign creditor claims, reviewing restructuring proposals, protecting voting and objection rights, challenging disputed concordat arrangements, evaluating guarantees and security, and pursuing available debt-recovery remedies.

Phone:
+90 312 434 22 22

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