- Preparation of a Preliminary Concordat Proposal (Current Status and Planning)
In order for the composition process to commence in accordance with the provisions of the Enforcement and Bankruptcy Law, it is a legal requirement that the Preliminary Composition Proposal to be submitted to the court be based on concrete, consistent, and accurate financial data. In this context, the professional services we provide are as follows:
- Financial Analysis: The company’s balance sheet structure—including its assets, liabilities, and inventory—is analyzed in accordance with relevant legislation and valuation standards. The company’s current financial position is compared with its projected financial position in a comparative analysis based on the financial statements.
- Future Projections and Cash Flow: Assuming that the business will continue its operations under legal protection, its future production and cash-generating capacity are projected in accordance with established standards.
- Structuring a Payment Proposal: The spreading of debts over time (term arrangement), a request for a proportional discount (discount arrangement), or a combination of both methods is prepared on a rational basis based on the company’s cash flow statements.
2. Grace Period and Management of Administrative Processes
In the official process that begins with the submission of the preliminary plan to the court and the issuance of a "provisional stay" order under the Enforcement and Bankruptcy Code, the monitoring of the company’s financial structure and the reporting of such information to the relevant authorities are coordinated:
- Financial Discipline and Monitoring: A business that has entered the legal protection process under a provisional stay of proceedings is monitored through periodic financial statements to determine whether it is acting in accordance with the objectives set forth in the preliminary plan.
- Coordination with the Board of Concordat Commissioners: All interim financial statements, trial balances, and activity reports requested by the commission appointed by the court to oversee the process shall be submitted in a transparent and auditable format, in accordance with the Uniform Chart of Accounts and Turkish Accounting Standards (TMS).
- Final Deadline Reports: If the company’s trend toward recovery is supported by financial data, technical financial analyses are prepared to serve as the basis for the court’s assessment of a “definitive moratorium.”
3. Creditors’ Committee and Approval Phase
The final stage of the process involves submitting the prepared financial plan to the creditors for approval in accordance with legal requirements and finalizing it with court approval:
- Creditors' Meeting and Financial Presentations: At the creditors' committee meeting, the company's payment capacity and projections, as outlined in its preliminary plan, are explained based entirely on objective financial statements.
- Final Report for Court Certification: If the legal majority specified in the Enforcement and Bankruptcy Law is met, the final financial statements and reports that will serve as the basis for the court’s approval decision are submitted to the relevant authorities.
The Importance of Professional Financial Consulting
The concordat process is an administrative procedure that goes beyond standard accounting practices and requires the simultaneous application of enforcement and bankruptcy law and financial reporting standards, demanding a high level of professional expertise. The absence of a required document or a technical error in cash flow projections can result in the legal rejection of the process.