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23 September 2016
On July 15 2016 Parliament enacted an omnibus bill which amended several laws. The Law on the Amendment of Some Laws to Improve the Investment Environment focuses on:
Conversely, the law introduces new provisions regarding:
This update focuses on the amendments regarding the postponement of bankruptcy.
The postponement of bankruptcy is a mechanism regulated under the Enforcement and Bankruptcy Law that provides stock corporations and cooperatives with poor financial standing an opportunity to overcome financial difficulties and save their business. However, the Enforcement and Bankruptcy Law can also damage creditors' rights, as enforcement proceedings initiated for the collection of receivables against an applicant for postponement are suspended during this period, which unavoidably leads to misuse of the mechanism. Due to a drastic increase in the number of postponement applications in recent years, more detailed regulations and wider restrictions were required in order to preserve the exceptional nature of this mechanism. The major amendments that the omnibus bill introduced in this regard are as follows:
As a legal mechanism open to the misuse of debtors, the limitation of applications for the postponement of bankruptcy has been on Parliament's agenda for some time. The omnibus bill aims to establish stricter norms for such applications, but also to make filing for concordat a more attractive option than the postponement of bankruptcy.
Although the Enforcement and Bankruptcy Law's new provisions entered into force with immediate effect on July 15 2016, applications for the postponement of bankruptcy were prohibited by Decree-Law 669 dated July 25 2016 for the duration of the state of emergency. During this three-month period from July 20 2016, applications for the postponement of bankruptcy will not be considered. Further, according to Decree-Law 673 dated August 15 2016, during the state of emergency the courts cannot grant a decision for the postponement of bankruptcy or decide for an interim injunction.
For further information on this topic please contact Beril Yayla or Asena A Keser at Gün & Partners by telephone (+90 212 354 00 00) or email (email@example.com or firstname.lastname@example.org). The Gün & Partners website can be accessed at www.gun.av.tr.
(1) Although the foundation and duties of regional appellate courts were regulated under Act 5235 dated September 26 2004, the regional appellate courts did not start functioning until July 20 2016. From this date, regional appellate courts have been functioning as the ordinary appeal courts. Conversely, the Court of Appeals will act as the court establishing jurisprudence and dealing with appeals under limited circumstances.
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