Financial restructuring agreements

The idea of survival of the activities of debtors who are incapable of paying their debts, rather than having them declared bankrupt, has gained strength worldwide, especially with the practical experience brought by economic crises and pandemics. The rapid increase in debtors' applications for restructuring during the COVID-19 pandemic has intensified discussions and research on this subject. In the light of this experience, both lawmakers and scholars have started researching the elements of an ideal restructuring by analysing restructuring systems in different legal systems. These studies have also had an impact on positive law, leading to the implementation of new restructuring methods in various legal systems in recent years as well as amendment of existing restructuring systems to meet today's needs. During this process, the benefits of out-of-court restructuring methods have been highlighted by legal scholars, and studies on out-of-court restructuring methods have gained momentum in different countries. The importance of an effective restructuring method, especially during trying times like pandemic periods, has been emphasized in Turkish legal doctrine as well. In Turkish law, an out-of-court restructuring method called financial restructuring, inspired by the London approach in English law, was previously enacted and successfully implemented for a temporary period in 2002 and 2006. The financial restructuring was lastly enacted on 17 July 2019, and it was again enforced for a temporary period, which ended on 15 July 2023. During this four years' period, the financial restructuring method was vastly used in practice, and numerous financial restructuring agreements on significant amounts of debt was signed. The financial restructuring agreements which were signed until the end date of 15 July 2023, will continue to be in effect for many more years until the completion of the payment plans envisaged under the signed financial restructuring agreement. Therefore, the topic seems to stay hot for years. This thesis aims to explore the history of the financial restructuring method in Turkish law, as well as the legislation related to the financial restructuring method enacted 17 July 2019. It also examines the restructuring process under the Large-Scale Framework Agreement and the content of signed financial restructuring agreements under different sections in order to elucidate the principles of financial restructuring method.