Fearing abuse, AK Party introduces legislation revamping concordat process
With the increasing number of concordats in recent months and the misuse of speculation, the AK Party has proposed a law that will both make concordat applications more difficult and better manage the process. The law will also address commercial disputes. The mediation facility, which is still a precondition for dispute cases between workers and the employers, will now be implemented in commercial disputes. So, in commercial claims and compensation cases, it is necessary to apply to the mediator before the case is opened.
Who will prepare concordat reports?
With the new regulation, the scope of independent auditing firms to report will be reduced. The audit will be carried out by independent auditing bodies authorized by the Public Oversight Accounting and Auditing Standards Authority that audit public interest organizations. While in the previous regulation the financial analysis report was sufficient for the concordat, a restriction was introduced by adding ‘reasonable assurance audit report’ in the proposal. The report will be prepared in accordance with Turkish Standards on Auditing. The selection of the concordat commissioner will be selected from the list of committees created by expert committees. While registration from the institutions authorized by the Ministry of Justice must be completed for registration, one person will not be able to act as a temporary commissioner or a commissioner in more than five files simultaneously. The provisions in force on the date of demand will be applied to the demands of the concordat on the date of entry into force of the regulation.
Mediation requirements for commercial claims cases
With the law proposal, new regulations for commercial claims cases will be added as well. In commercial cases, a new requirement will force mediation before a lawsuit for claims over compensation and payment of debt. This requirement will not apply to cases of first instance courts and district courts of justice and cases in the Court of Cassation as of the date of entry into force of the regulation. If it is understood that the case was opened without applying to the mediator, the case will be rejected.
The AK Party, which put the proposal on the agenda of the Parliamentary Justice Commission last week, is expected to enact it at the parliament this week. According to the information provided by the Minister of Trade, Ruhsar Pekcan, so far 356 companies have declared concordat. Concordat is a mechanism aimed at saving companies from possible bankruptcy. Companies that cannot pay their debts can restructure their debts by extending their maturity or demanding the concordat to pay off their debts or to get rid of a possible bankruptcy.