Turkish Company Files for Concordat While Owing Money to a Foreign Supplier: What Should the Creditor Do? (2026 Updated Guide)

A Turkish company enters concordat proceedings while owing money to a foreign supplier. Learn how foreign creditors can protect their claims, submit receivables, challenge disputed debts and respond to restructuring proposals.

A foreign supplier that has sold goods or services to a Turkish company may suddenly discover that its customer has applied for concordat protection while substantial invoices remain unpaid. This can fundamentally change the creditor’s collection strategy. Ordinary enforcement measures may be restricted, payment schedules may be proposed, the debtor’s activities may become subject to judicial supervision and the foreign supplier may need to establish its claim formally within the concordat process. The creditor should not simply wait for the Turkish customer to recover financially. It should immediately determine the status of the concordat proceedings, the amount and legal nature of its receivable, available security, relevant procedural periods and whether the debtor disputes the debt.

What Is Concordat in Turkey?

Concordat is a court-supervised restructuring mechanism intended to address a debtor’s financial difficulties through an arrangement with creditors. Depending on the case, the debtor may seek additional time, reduction or restructuring of debts while attempting to continue its business.

For a foreign supplier, this means the receivable may no longer be treated as an ordinary overdue commercial invoice that can simply be pursued through conventional collection methods.

Why Is the Concordat Filing Important for Foreign Creditors?

The proceedings can affect enforcement activity, payment expectations, negotiations and the creditor’s ability to influence the restructuring. The foreign company should therefore identify the exact procedural stage rather than relying on the debtor’s statement that it has “entered restructuring.”

Verify Whether a Court Has Actually Granted Protection

A company saying that it intends to apply for concordat is different from a court having issued a temporary or definitive concordat-related decision. Obtain the relevant court information and determine the current procedural status.

This distinction can materially affect creditor strategy.

Determine the Exact Amount Owed

Prepare a complete receivables file including principal, invoices, contractual interest where applicable, delivery costs and other amounts claimed.

The figures should be supported by documentary evidence and capable of being reconciled with the creditor’s accounting records.

Gather the Supply Contract Immediately

The original contract should be reviewed together with purchase orders, invoices, delivery documents, correspondence and payment records.

Important provisions can include governing law, jurisdiction, arbitration, payment dates, interest, retention of title, guarantees and termination rights.

Foreign Currency Claims Require Careful Review

Many international supply agreements are denominated in euros, US dollars or another foreign currency. The creditor should determine how the claim should be asserted and treated within the Turkish proceedings.

Currency fluctuations can make this commercially significant.

Documentary Evidence Is Critical

Foreign suppliers should collect invoices, purchase orders, delivery confirmations, bills of lading, customs documents, warehouse receipts, account statements and acknowledgments of debt.

A well-organized documentary file becomes particularly important if the debtor later disputes part of the receivable.

Does the Foreign Supplier Have to Register Its Claim?

Creditors should monitor the formal invitation and claim-notification process applicable to the proceedings and submit their claims in accordance with the relevant procedure and period.

Ignoring notifications because the creditor is located outside Turkey can create serious procedural disadvantages.

Monitor Official Announcements

A foreign creditor should not rely exclusively on communications from the debtor. Concordat proceedings involve court-supervised procedural steps and creditor announcements.

The creditor should establish a monitoring system as soon as it learns about the proceedings.

What If the Foreign Supplier Learns About the Concordat Late?

The creditor should obtain the case information immediately and determine which procedural stages have already occurred. Whether a missed step can be remedied depends on the circumstances and applicable procedural rules.

Delay should not be compounded by further inactivity.

What If the Debtor Accepts the Debt?

An acknowledged claim may be easier to establish, but the creditor should still ensure that the amount recorded in the proceedings corresponds with the actual debt.

Check principal, currency, invoices and any applicable ancillary amounts.

What If the Turkish Company Disputes the Foreign Supplier’s Claim?

A debtor may dispute the entire receivable or only part of it. The creditor should identify the exact reason.

Typical disputes may concern delivery, defective goods, quantity, price, set-off, payment already made, contractual penalties or allegations that the invoice does not reflect the underlying transaction.

A Disputed Claim Should Not Be Ignored

The foreign supplier should respond with contractual and commercial evidence. If necessary, separate litigation, arbitration or another appropriate procedure may need to be considered to establish the receivable.

The relationship between that dispute and the concordat process should be managed carefully.

What Happens to Existing Enforcement Proceedings?

Concordat protection can significantly affect enforcement activity against the debtor. The precise effect depends on the nature of the claim, security and procedural stage.

The creditor should therefore review any existing Turkish enforcement file immediately after learning about the concordat.

Can the Foreign Supplier Start a New Enforcement Proceeding?

Restrictions may apply during concordat protection. The creditor should determine whether its particular claim falls within an exception or whether enforcement is restricted.

Attempting collection without reviewing the concordat decision can waste time and expense.

Secured and Unsecured Creditors Are Not in the Same Position

One of the first questions should be whether the foreign supplier possesses security.

A bank guarantee, pledge, mortgage, retention mechanism, third-party guarantee or another security arrangement can materially change the creditor’s risk and available remedies.

Review Bank Guarantees Immediately

If payment is supported by a bank guarantee, determine its wording, expiry date, demand conditions and governing law.

Do not allow an independent guarantee to expire while concentrating exclusively on the concordat case.

Personal or Corporate Guarantees May Be Important

The supplier may have guarantees from shareholders, directors, parent companies or affiliates.

Whether those guarantees can be pursued independently depends on their terms and applicable law. They should be analyzed separately from the debtor company’s concordat position.

Retention of Title Clauses Require Specific Analysis

International sellers sometimes provide that ownership remains with the seller until full payment. The effectiveness and consequences of such a clause in Turkey cannot simply be assumed from the foreign contract.

The goods, transaction structure and applicable Turkish rules should be reviewed before relying on retention of title.

Are the Goods Still in the Debtor’s Possession?

Determine whether unpaid goods remain identifiable in the debtor’s warehouse, have been resold, incorporated into production or transferred elsewhere.

This factual investigation can become relevant to contractual and proprietary remedies.

Stop Uncontrolled New Deliveries

A foreign supplier should reconsider additional shipments immediately after learning of serious financial distress.

Continuing to supply substantial goods on ordinary credit terms can increase exposure.

Review Outstanding Purchase Orders

Determine which orders have been produced, shipped, delivered or remain cancellable.

The contract should be reviewed before suspending performance, particularly where the creditor itself could otherwise face a breach claim.

Can the Supplier Demand Advance Payment for Future Orders?

Commercially, the supplier may attempt to restructure future dealings through advance payment, letters of credit or stronger security. Whether it can unilaterally change existing contractual terms depends on the agreement and applicable law.

Future supply risk should be separated from the treatment of historical debt.

Review Set-Off Possibilities

If the foreign supplier also owes money to the Turkish company, potential set-off rights should be analyzed carefully.

Timing, reciprocity, maturity and the applicable concordat rules can affect whether set-off is legally available.

Examine Related Companies

Sometimes the debtor belongs to a larger corporate group. Determine whether another group company purchased goods, guaranteed obligations or received assets connected with the transaction.

Corporate affiliation alone does not automatically make another company liable, but the contractual structure should be investigated.

Watch for Asset Transfers

If substantial assets were transferred before the concordat filing, creditors may need to investigate the timing, recipient and commercial basis of those transactions.

Transfers to shareholders, directors, relatives or related companies can require particular scrutiny.

Do Not Assume Concordat Automatically Eliminates the Debt

Concordat is not simply a declaration that all outstanding debts disappear. The effect on a particular receivable depends on the approved restructuring, legal nature of the claim and applicable rules.

Foreign creditors should analyze the proposed treatment rather than treating the filing as a complete loss.

Examine the Proposed Concordat Plan

The creditor should determine what percentage of its claim is proposed to be paid, when payments will occur and whether the proposal involves maturity extension, reduction or another restructuring.

Commercial viability matters as much as the headline repayment percentage.

Analyze the Debtor’s Financial Projections

A promise to repay creditors over several years has little value if the underlying cash-flow assumptions are unrealistic.

Where material amounts are involved, financial analysis may be necessary alongside legal review.

Examine the Company’s Assets and Liabilities

The creditor should understand the debtor’s overall financial position, secured debt, major creditors, receivables, inventory and operating prospects where information is available through the proceedings.

This helps assess whether the proposed concordat offers a realistic recovery.

Creditor Voting Can Be Important

Depending on the procedural stage and treatment of the creditor’s claim, creditors can have an important role in the concordat process.

A foreign supplier should therefore ensure that its claim and representation are properly organized before relevant creditor decisions occur.

Representation in Turkey May Be Necessary

A foreign company does not need to abandon its rights because its management is abroad. It can arrange appropriate representation in Turkey to monitor proceedings, make submissions and protect procedural rights.

Corporate authority and power-of-attorney documents should be prepared without unnecessary delay.

Foreign Corporate Documents May Need Preparation

Depending on the procedural act, corporate registry documents, authorization documents, powers of attorney and translations may be required.

International creditors should begin document preparation early rather than waiting until immediately before a procedural deadline.

Arbitration Clauses Should Be Reviewed

If the supply agreement contains an arbitration clause, disputes concerning whether the debt exists or its amount may need to be considered in light of that agreement.

The existence of arbitration does not mean the creditor should ignore the Turkish concordat proceedings.

Foreign Court Jurisdiction Clauses Also Require Analysis

A foreign jurisdiction clause can affect the substantive debt dispute, but the Turkish insolvency-related proceeding may still require separate action in Turkey.

The creditor should coordinate the two procedural tracks rather than assuming one automatically replaces the other.

Foreign Judgments and Arbitral Awards

If the supplier already has a foreign judgment or arbitral award, determine its procedural significance and whether recognition or enforcement steps are required in Turkey.

Do not assume that a foreign decision can automatically be enforced against Turkish assets without the applicable Turkish procedure.

Can Interest Continue to Accrue?

Interest treatment can be affected by the legal nature of the claim and concordat framework. The creditor should calculate principal and interest separately and determine what amount can properly be asserted.

What Happens If the Concordat Is Approved?

If the court confirms the concordat, affected creditors may become bound according to the applicable legal framework and the terms of the confirmed arrangement.

The creditor should record every payment date and monitor compliance.

What If the Debtor Does Not Perform the Approved Concordat?

Failure to comply with the confirmed arrangement can create additional remedies. The creditor should not allow missed restructuring payments to accumulate without legal review.

What If the Concordat Fails?

If the restructuring cannot be confirmed or later fails, the debtor may face significantly more serious insolvency consequences depending on its legal and financial position.

The foreign creditor should prepare for this possibility from the beginning.

Bankruptcy Risk Should Be Evaluated

The creditor should compare likely recovery under the proposed concordat with the potential outcome of bankruptcy or other enforcement scenarios.

This is both a legal and economic assessment.

Supplier Claims Against Third Parties Should Be Preserved

The debtor’s financial distress may coincide with claims against guarantors, insurers, banks, carriers or other parties.

Do not allow limitation periods or guarantee expiry dates to pass while waiting for the concordat outcome.

Review Credit Insurance

If the supplier has trade-credit insurance or another policy covering customer insolvency or non-payment, notify the insurer promptly in accordance with policy conditions.

The policy may impose strict notification and recovery-cooperation requirements.

Preserve Communications With the Debtor

Emails and messages acknowledging the debt, requesting additional time or proposing repayment schedules can become important evidence.

Do not delete communications simply because the relationship has deteriorated.

Avoid Informal Side Agreements Without Review

A debtor may propose direct payment arrangements outside the broader restructuring. Before accepting such arrangements, the creditor should assess their legality and effect on the concordat proceedings.

2026 Strategy for Foreign Suppliers

A foreign supplier facing a Turkish customer’s concordat should approach the matter as both an insolvency proceeding and an international commercial dispute. The creditor should verify the court proceedings, calculate and document the receivable, monitor procedural notices, protect claim-submission and voting rights, investigate security, stop uncontrolled additional exposure, examine guarantees and insurance, review disputed claims and prepare for both successful restructuring and possible insolvency failure.

For substantial cross-border claims, Lawyer Fırat Fesih Kaya recommends that the contractual, enforcement and concordat dimensions be analyzed together. A strong invoice claim can still suffer commercially if the creditor misses a procedural opportunity or allows independent security to expire.

Frequently Asked Questions

Can a foreign supplier participate in a Turkish concordat proceeding?

Yes. A foreign creditor should identify the applicable procedural requirements and ensure that its receivable and representation are properly documented.

Does concordat cancel the foreign supplier’s debt automatically?

No. The effect depends on the proceedings, the confirmed restructuring and the legal characteristics of the claim.

Can the foreign creditor continue enforcement proceedings?

Concordat protection can restrict enforcement proceedings. The exact position should be examined according to the claim, security and procedural stage.

What if the Turkish debtor disputes the invoices?

The foreign supplier should establish the receivable with contracts, invoices, delivery records, correspondence and other evidence and assess any separate litigation or arbitration required.

Should the supplier continue delivering goods?

Further unsecured exposure should be reviewed carefully. Existing contractual obligations should also be examined before shipments are suspended.

Can a foreign supplier rely on a bank guarantee?

Potentially. The guarantee should be reviewed separately, particularly its expiry date and demand conditions.

What if the supply agreement contains an arbitration clause?

The arbitration clause may remain important for disputes concerning the underlying debt, while the creditor may still need to participate in the Turkish concordat proceeding.

Can the creditor recover from a parent company or shareholder?

Not merely because of corporate affiliation. Separate guarantees, contractual obligations or another legal basis would normally need to be established.

What if the concordat proposal offers only partial payment?

The creditor should assess the proposed recovery, payment period, debtor’s financial projections, security position and alternatives before determining its strategy.

What should a foreign supplier do first?

Verify the court proceeding, calculate the exact receivable, collect all contractual and delivery evidence, determine whether security exists and immediately identify every procedural period affecting submission, objection and creditor participation rights.

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

When a Turkish customer enters concordat proceedings, foreign suppliers may face unpaid invoices, restricted enforcement, disputed receivables, restructuring proposals, guarantees, arbitration issues and possible bankruptcy exposure. Fırat Fesih Kaya Law Office assists foreign suppliers, international companies and overseas creditors seeking to protect commercial receivables against financially distressed Turkish companies. Lawyer Fırat Fesih Kaya provides legal assistance in documenting and submitting creditor claims, monitoring concordat proceedings, challenging disputed receivables, reviewing guarantees and security, representing creditors in restructuring procedures and pursuing available enforcement, litigation or arbitration strategies.

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