Amendment To Provisions Of Concordatum 10 December 2018
The Bill of Law on Procedure of Commencing Execution Proceedings of Receivables Arising from Subscription Agreements ( “Law”) amending various articles of Bankruptcy and Enforcement Law including provisions of concordatum has accepted by Grand National Assembly Of Turkey and has passed into law. The law is expected to be published in the Official Gazette in the upcoming days and the amendments are expected to come into force in soon. We would like to submit the amendments accepted in accordance with the law in terms of concordatum to your information below.
1. What Are The Amendments To Preliminary Project Of Concordatum?
The amendment has brought about a change on the preparation of the audit report that assures the proposal takes part in the preliminary project of concordatum – which will be submitted to the court during the application of concordatum – will be materialize as expected.
Accordingly, the audit report will now be prepared only by Public Oversight Accounting and Auditing Standards Authority under the supervision of public interest entities. In addition, the audit report will have to provide “reasonable assurance” that the proposal in the preliminary project of concordatum will be materialize as expected, not “highly-likely possibility”.
Therefore, restrictions were imposed on the persons who will prepare the audit report and the report has to contain more accurate data that the proposal takes place in the preliminary project will be realized as expected.
2. What Will Be The Responsibility Of The Institutions That Prepare The Audit Report And Its Bases?
There was no regulation on the responsibility of institutions preparing the audit report before the Law. In accordance with the Law, the audit report that will be prepared, activities, rights and obligations of the audit institutions at the audits that will be constitute the basis of the reports, examination and audit of the reports and legal and administrative responsibilities may arise from these reports are regulated.
In conjunction with the Law, the institutions which prepare the audit report will be responsible for the information and documents they submit in the content of the report and the damages that may arise from it.
3. What Are The Changes Made In The Event of the Appointment of Three Trustee in Composition?
With the Law, in relation to the qualifications of the Trustees in Composition, in addition to the qualifications set out in the “Regulation on the Qualifications of the Trustee in Composition and the Mandatory Creation of the Board of Creditors” published in the Official Gazette on 02.06.2018; in the event of the appointment of three Trustee in Composition, one of the trustee has to be selected from among the independent auditors authorized by the Public Oversight, Accounting and Auditing Standards Authority and approved as cap auditors, provided that they carry on the business in the province where the court is located.
4. What Are The Amendments To The Appointment Of The Trustee in Composition?
Despite that there is no obligation to be elected from the list of trustees in composition to be appointed before the law; it was envisaged by the Law that the trustees would be selected from the list of trustees in composition established by the regional commission of experts. In order to register in the list, it is obligatory to have the education from the institutes allowed by the Ministry of Justice. However, if there is no trustee to be assigned in the list, it is possible to make assignments from the outside of the list. Even if it is not registered in the list, the Public Oversight, Accounting and Auditing Standards Authority may be appointed as a trustee in composition.
5. What Are The Changes Brought About The Rejection Of The Claim For Concordatum?
In addition to the reasons for the rejection of the claim for concordatum, in the event that it is understood that the debtor is acting to harm the creditors, the claim for concordatum might be rejected and the bankruptcy might be decided.
6. Will Be The Changes Implemented To Ongoing Claims?
The amendments handed by the Law shall not be implemented to the claims for concordatum which are pending on the date of entry into force. The obligation to appoint the trustee from the list shall not be implemented until the list of trustee in concordatum is established.
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