846 Companies File for Bankruptcy Protection

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Minister of Commerce Ruhsar Pekcan has announced that in 2018, 846 companies operating in Turkey have filed for bankruptcy protection, which is commonly termed in Turkish as "declaration of concordat".

The statement of Minister Pekcan has shown that 490 companies have declared concordat in Turkey over the last month considering that the number cited by the Minister on November 9 was 365.

It was asked during budget discussions

The recent number has been announced by Ruhsar Pekcan in response to the questions raised by MPs during the discussions on 2019 budget in the Grand National Assembly of Turkey (TBMM) General Assembly.

Answering the questions of the MPs, Minister Pekcan has said, "The number is 294 in joint stock companies and 552 in limited liability companies, which accounts for 846 companies in total. The provincial distribution is as follows: 282 in İstanbul, 115 in Ankara, 65 in İzmir, 46 in Kocaeli, 28 in Mersin, 25 in Bursa, 13 in Hatay, 14 in Kayseri and 260 of them in other provinces."

In her statement on November 9, Pekcan said that 356 companies in total declared concordat in 2018 and announced the provincial distribution as follows: "132 in İstanbul, 50 in Ankara, 27 in İzmir, 26 in Kocaeli, 13 in Bursa, 11 in Hatay, 9 in Mersin and 88 companies in other provinces."

What is concordat?

Concordat is a court-approved agreement between a debtor, whose state of business has deteriorated to the point where it cannot pay off its debt, and its creditors. When the debtor and the creditor agree on a concordat, the debtor pays the debt in line with the agreement stipulated under the concordat.

The practice of concordat has entered into force after the requests for suspension of bankruptcy were halted as per a Statutory Decree issued during the State of Emergency on July 31, 2016. (OI/HK/SD)