Foreign Creditor Rights During Concordat Proceedings in Turkey: Filing, Voting and Objections (2026 Updated Guide)

Foreign creditors can protect claims during Turkish concordat proceedings by filing receivables, reviewing disputed claims, participating in voting and challenging confirmation where legally justified.

When a Turkish company enters concordat proceedings, a foreign creditor may suddenly face uncertainty over unpaid invoices, loans, supply agreements, service fees or other commercial receivables. The fact that the creditor is established outside Turkey does not by itself prevent the creditor from asserting its claim in the Turkish concordat process. The critical issues are whether the receivable is properly documented, whether it is declared within the relevant procedure, whether the debtor accepts or disputes it, how the claim affects voting and whether the creditor has grounds to object to the proposed restructuring or its confirmation. A foreign creditor that ignores the Turkish proceeding may lose significant procedural and commercial leverage even though the underlying debt continues to exist.

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 proposal and court process, creditors may face deferred payment, restructuring of payment terms or another arrangement concerning their receivables.

For a foreign creditor, the proceeding should therefore be treated as an active debt-recovery matter rather than simply waiting for the Turkish company to resume ordinary payments.

Do Foreign Creditors Have Rights in a Turkish Concordat?

Yes. A creditor’s foreign nationality or foreign place of establishment does not by itself eliminate its creditor status. What matters is the existence, amount and legal nature of the receivable and its treatment under the applicable concordat rules.

Foreign creditors should nevertheless act quickly because the proceedings operate through formal announcements, creditor-registration procedures and court-supervised deadlines.

How Can a Foreign Creditor Learn That a Turkish Debtor Has Entered Concordat?

The creditor may learn through the debtor, commercial contacts, court-related announcements, the concordat commissioner or collection proceedings already pending against the debtor.

Once the proceeding is discovered, the creditor should immediately identify the competent court, file information, commissioner, stage of proceedings and applicable deadline for submitting the claim.

The First Step: Determine the Status of the Concordat

A foreign creditor should determine whether the debtor is under a temporary period, definitive period or a later confirmation stage. The procedural position affects what the creditor should do next.

Waiting until the confirmation hearing can severely reduce the time available to organize evidence and challenge disputed treatment.

Filing the Foreign Creditor’s Claim

When creditors are invited to declare their receivables, the foreign creditor should submit its claim within the applicable period and in the required manner. The filing should clearly identify the creditor, debtor, legal basis of the debt, principal amount and supporting documents.

A vague statement that the Turkish company “owes money” is not an adequate substitute for a properly documented creditor file.

What Documents Should Be Submitted?

Depending on the transaction, evidence may include contracts, purchase orders, invoices, account statements, delivery documents, bills of lading, acceptance records, correspondence, bank transfers, acknowledgments of debt, settlement documents and prior court or arbitration decisions.

The evidence should establish both the legal basis and amount of the claim.

Foreign-Language Documents Should Be Prepared Carefully

Contracts and invoices may be in English, German, French, Chinese or another language. The creditor should determine which documents require Turkish translation and whether certified translation or another formal requirement applies in the particular procedural context.

Translation should preserve important commercial terminology accurately.

Foreign Currency Claims Require Special Attention

A foreign creditor may have a claim denominated in euros, US dollars, pounds or another currency. The original contract, applicable payment terms and concordat treatment should be reviewed carefully to determine how the claim is recorded and dealt with in the proceeding.

Currency conversion can materially affect voting and eventual recovery.

What If the Debtor Accepts the Claim?

An admitted claim generally creates fewer procedural difficulties. However, the creditor should still verify that the amount, currency, security status and other material details have been recorded correctly.

A partial admission should not be mistaken for acceptance of the entire receivable.

What If the Debtor Disputes the Foreign Creditor’s Claim?

This is one of the most important risks for foreign companies. A debtor may dispute the entire debt or only part of it.

The foreign creditor should identify exactly what is contested: existence of the debt, amount, delivery, quality, set-off, limitation, contractual penalty, interest or another issue.

A Disputed Claim Does Not Necessarily Disappear

The debtor’s objection does not by itself establish that the creditor has no receivable. The substantive debt dispute and the treatment of the claim within the concordat procedure should be analyzed separately.

The creditor may need to pursue or preserve appropriate litigation, arbitration or other rights concerning the disputed debt.

Existing Lawsuits Should Be Reviewed

If the foreign creditor already has a pending Turkish lawsuit, arbitration proceeding or enforcement matter, the effect of the concordat should be examined immediately.

Do not withdraw an existing proceeding merely because the debtor has entered concordat without first understanding the legal consequences.

Foreign Judgments and Arbitral Awards

A foreign creditor may already possess a foreign court judgment or arbitral award against the Turkish debtor. The status of that decision under Turkish recognition, enforcement and concordat rules should be evaluated.

An award or foreign judgment can significantly strengthen the evidentiary position, but enforcement questions may still remain.

Secured and Unsecured Creditors May Be Treated Differently

The creditor should identify whether the receivable is supported by a pledge, mortgage, guarantee or another form of security.

Security rights can materially affect the creditor’s position and should be analyzed separately from an ordinary unsecured trade receivable.

Guarantees Should Be Reviewed Separately

A Turkish company’s concordat does not mean that every third-party guarantee automatically has the same procedural status.

If shareholders, group companies, directors, banks or third parties provided guarantees, determine whether claims against those guarantors remain independently available.

Letters of Guarantee and Other Security Instruments

Where the foreign creditor holds a bank guarantee, demand guarantee or another independent security instrument, its wording should be examined immediately.

The creditor should not assume that the debtor’s concordat automatically prevents every demand under an independent security arrangement.

Can Foreign Creditors Vote on the Concordat Proposal?

Creditors whose claims fall within the applicable voting framework may participate in the decision on the concordat proposal subject to the rules governing eligible claims and voting calculations.

The foreign creditor should therefore ensure that its claim is properly recognized for voting purposes.

Why Voting Rights Matter

Voting is not merely symbolic. The concordat’s acceptance depends on statutory creditor and receivable majorities under the applicable framework.

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

How Are Concordat Majorities Calculated?

Turkish concordat legislation provides alternative statutory majority structures based on the number of creditors and amount of receivables represented.

For a foreign creditor, the practical issue is not simply understanding the mathematical formula but ensuring that the creditor’s own receivable has been included correctly in the voting calculation.

Disputed Claims Can Affect Voting

If a claim is disputed, questions may arise concerning whether and to what extent the creditor participates in voting. This can become particularly important where the disputed foreign claim represents a substantial percentage of the debtor’s liabilities.

The creditor should therefore challenge incorrect exclusion or undervaluation promptly through the applicable procedure.

Related Creditors Require Special Attention

Certain relationships between the debtor and creditors can affect voting treatment. The creditor list should therefore be examined where there is concern that affiliated or closely connected creditors are influencing the result.

Corporate relationships may be particularly important in group-company restructurings.

Review the Entire Creditor Structure

A foreign creditor should not analyze only its own debt. Where commercially important, review the debtor’s creditor composition, secured liabilities, public debts, major trade creditors and related-party positions to understand the restructuring realistically.

This can help determine whether the proposal is viable.

Examine the Concordat Proposal Economically

The creditor should ask whether the proposed payments are realistically achievable.

Review projected cash flows, payment periods, operational assumptions, asset disposals, financing sources and any other resources relied upon to fund the proposal.

Do Not Vote Solely Based on the Promised Percentage

A promise to pay a high percentage may be meaningless if the debtor cannot generate sufficient cash.

The quality and feasibility of the restructuring plan can be more important than the headline recovery percentage.

Compare Concordat Recovery With Alternative Outcomes

One important question is what creditors could reasonably expect if the concordat fails and insolvency consequences follow.

This comparison can influence both voting strategy and objections to confirmation.

Can a Foreign Creditor Vote Against the Proposal?

Where the creditor is entitled to participate in voting, it can take the position permitted by the applicable voting procedure. A foreign creditor is not required to support a restructuring simply because the debtor claims that rejection will lead to insolvency.

The decision should be based on legal rights, security position and expected recovery.

Can the Creditor Negotiate?

Commercial negotiations can continue alongside the formal process where legally permissible.

However, any individual arrangement should be reviewed carefully in light of equality principles, the concordat structure and the rights of other creditors.

Be Careful With Preferential Side Arrangements

A creditor should not accept a side arrangement without considering whether it conflicts with mandatory concordat rules or creates later enforceability problems.

Any settlement should be legally reviewed before execution.

What Happens After Creditors Vote?

Creditor approval does not automatically complete the restructuring. Judicial confirmation is a critical stage.

The court examines whether the statutory requirements for confirmation are satisfied.

Can a Foreign Creditor Object to Confirmation?

Potentially, yes. A foreign creditor that believes its rights are unlawfully affected should examine available objection mechanisms and procedural deadlines.

The objection should identify concrete legal or factual deficiencies rather than simply state that the creditor dislikes the commercial result.

Grounds for Objection May Include Incorrect Treatment of the Claim

If the creditor’s valid claim was improperly excluded, undervalued or incorrectly classified, this may require immediate procedural action.

The creditor should preserve evidence showing the correct amount and status.

Voting Irregularities Should Be Examined

Where the result depends on disputed voting calculations, review which creditors participated, the amounts counted and whether the statutory majority was actually achieved.

A mathematical or classification error can have significant consequences.

Related-Party Voting Concerns

If the creditor suspects that affiliated creditors were improperly used to create the required majority, corporate and commercial relationships should be investigated.

Evidence is more valuable than speculation.

Feasibility Can Be Challenged

A restructuring proposal that depends on unrealistic revenues, unidentified financing or speculative asset sales may raise serious concerns.

Financial evidence and, where necessary, expert analysis can strengthen an objection.

Asset Transfers Before Concordat Should Be Investigated

Foreign creditors may discover that valuable assets were transferred before the restructuring application.

Company records, title information, corporate transactions and related-party transfers may need examination to determine whether separate creditor remedies exist.

Hidden Assets and Receivables Can Affect the Analysis

The debtor’s economic position should reflect not only visible physical assets but also bank receivables, related-company claims, intellectual property, investments and other valuable rights where relevant.

A materially incomplete financial picture can affect creditor decision-making.

Can the Foreign Creditor Continue Enforcement Proceedings?

Concordat can impose significant restrictions on individual enforcement actions during the protected period. The precise effect depends on the nature of the claim, security and procedural stage.

A foreign creditor should therefore obtain case-specific advice before initiating or continuing attachment measures.

Do Not Assume Every Claim Is Frozen in Exactly the Same Way

Secured claims, privileged claims and other special categories may raise different questions.

The nature of the creditor’s right should be identified before deciding that enforcement is completely unavailable.

Limitation Periods and Procedural Rights Must Be Protected

The existence of concordat proceedings should not lead the foreign creditor to ignore limitation periods, litigation requirements or other procedural rights.

Create a separate deadline calendar for the underlying claim and the concordat proceeding.

Interest Should Be Analyzed Separately

Questions concerning contractual and default interest can become important when calculating the creditor’s position.

The creditor should distinguish the original contractual entitlement from the treatment of interest within the concordat framework.

Set-Off Rights Can Be Valuable

Where the foreign creditor also owes money to the Turkish debtor, potential set-off rights should be examined promptly.

Set-off in insolvency-related situations can involve specific requirements and should not be implemented casually.

Retention of Title Clauses Should Be Reviewed

International suppliers sometimes sell machinery, equipment or goods subject to retention-of-title arrangements.

Whether such a clause provides effective protection in Turkey depends on its structure, governing law and applicable Turkish property and insolvency principles.

Goods Still in Transit Require Immediate Review

If the creditor is a supplier and goods have not yet been delivered, review the contract, delivery terms and transport status before releasing additional goods to a debtor under concordat protection.

Continuing unsecured deliveries can substantially increase exposure.

Stop Automatic Credit Extensions

Foreign suppliers should immediately review open purchase orders, credit limits and automatic shipment arrangements.

New transactions should be evaluated separately from old concordat debt.

Post-Concordat Supplies Need Clear Terms

If the foreign supplier decides to continue business with the debtor, new sales should be structured carefully.

Payment in advance, stronger security or revised credit arrangements may be commercially appropriate depending on the circumstances.

Group Companies Should Be Analyzed Separately

A Turkish corporate group may contain several companies, but the financial distress of one entity does not automatically mean every group company has identical liabilities.

Identify the contractual debtor for each invoice.

Parent Company Liability Is Not Automatic

The existence of a foreign or Turkish parent company does not automatically make that company responsible for the concordat debtor’s obligations.

Guarantees, contractual undertakings and exceptional liability grounds should be examined separately.

Preserve Communications With the Debtor

Emails, acknowledgments of debt, payment promises and account confirmations can become valuable where the receivable is disputed.

Do not delete commercial correspondence merely because invoices already exist.

Prepare a Creditor Evidence File

A strong foreign-creditor file should contain the contract, invoices, delivery records, payment history, correspondence, security documents, litigation records, translations and concordat submissions.

Organized evidence is particularly important where procedural periods are short.

Monitor the Commissioner’s Reports

The concordat commissioner plays a central role in monitoring the debtor and the restructuring process. Relevant reports and procedural developments should be followed carefully where accessible within the applicable process.

Changes in the debtor’s financial condition can affect creditor strategy.

What If the Debtor Violates the Concordat Process?

Material deterioration, non-compliance or other developments during the proceeding can have legal consequences.

The creditor should document any relevant misconduct rather than relying on informal allegations.

What Happens If Concordat Is Not Confirmed?

The consequences depend on the debtor’s legal and financial position and the court’s decision. Insolvency or bankruptcy issues may become relevant in appropriate circumstances.

Foreign creditors should therefore prepare alternative recovery strategies before the confirmation decision.

What Happens If Concordat Is Confirmed?

The confirmed arrangement can materially affect claims falling within its scope. The creditor should review the final judgment and payment schedule carefully and monitor compliance.

Do not rely solely on the debtor’s informal explanation of the confirmed terms.

What If the Debtor Does Not Pay Under the Confirmed Concordat?

Failure to comply with confirmed payment obligations can give rise to further legal remedies depending on the circumstances and the creditor’s position.

Every missed payment should be documented.

Can a Foreign Creditor Challenge the Confirmed Concordat?

Turkish concordat legislation provides procedural remedies in connection with confirmation decisions, but standing, grounds and deadlines must be assessed carefully.

A foreign creditor considering a challenge should act immediately after learning of the relevant decision.

Foreign Creditor Strategy in 2026

Foreign creditors should approach Turkish concordat proceedings through three parallel tracks: protect the receivable, influence the restructuring where voting rights permit, and preserve alternative recovery options. The company should not focus exclusively on filing an invoice.

The commercial objective is to maximize realistic recovery while preventing the creditor’s procedural position from deteriorating during the restructuring.

Immediate Action Plan for Foreign Creditors

Once a Turkish customer enters concordat, the foreign creditor should immediately identify the court and proceeding, determine the procedural stage, calculate the full receivable, gather contracts and delivery evidence, prepare required translations, declare the claim within the applicable procedure, investigate any debtor objection, verify voting treatment, review security and guarantees, analyze the economic feasibility of the proposal, monitor confirmation proceedings and preserve litigation, arbitration and contractual remedies relating to disputed claims.

Frequently Asked Questions

Can a foreign company file a claim in a Turkish concordat?

Yes. Foreign status by itself does not prevent a creditor from asserting a receivable in the Turkish concordat process.

Is a foreign creditor required to have a Turkish company?

No. The underlying creditor can remain the foreign legal entity, although Turkish legal representation may be needed or strategically useful for procedural actions.

What happens if the Turkish debtor disputes the foreign creditor’s invoice?

The creditor should submit the underlying contract, delivery records, correspondence and other evidence. The substantive receivable dispute may require separate procedural action.

Can a foreign creditor vote?

If the creditor’s claim qualifies for voting under the applicable concordat rules, it may participate subject to the treatment of its receivable within the proceeding.

Can a disputed creditor participate in voting?

Disputed claims can raise special voting questions. The creditor should seek appropriate treatment of the claim rather than assume that the debtor’s objection automatically eliminates voting rights.

Can a foreign creditor vote against concordat?

A creditor entitled to vote can oppose the proposal according to the applicable procedure. The commercial and legal consequences should be assessed before voting.

Can a foreign creditor object to court confirmation?

Potentially. The creditor should examine standing, grounds and procedural deadlines applicable to objections and remedies concerning confirmation.

Does concordat cancel guarantees?

Not automatically. Guarantees and third-party security should be examined independently according to their wording and applicable law.

Should a foreign supplier continue delivering goods during concordat?

Only after reassessing credit risk, payment terms, security and the legal position of new receivables. Continuing ordinary unsecured credit without review can substantially increase exposure.

What should a foreign creditor do first?

Identify the concordat stage and the deadline for declaring the receivable, then build a complete evidence file proving the amount, currency, contractual basis and security status of the claim. Filing, voting and objection rights are much easier to protect when the creditor acts at the beginning of the proceeding rather than after confirmation.

Client-Focused Legal Support for Foreign Creditors in Turkish Concordat Proceedings

Foreign creditors facing a Turkish concordat may need coordinated assistance concerning claim registration, disputed receivables, creditor voting, secured claims, guarantees, confirmation objections, commercial contracts and cross-border debt recovery. Fırat Fesih Kaya Law Office assists international companies, foreign lenders, exporters and investors seeking to protect receivables against Turkish companies undergoing restructuring. Lawyer Fırat Fesih Kaya provides legal assistance in preparing creditor claims, reviewing concordat proposals, protecting voting rights, challenging disputed creditor treatment, evaluating objections to confirmation and coordinating litigation, arbitration and enforcement strategies arising from cross-border commercial debts.

Phone:
+90 312 434 22 22

Mobile:
+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