Bankruptcy in Turkey: A Comparative Study of Turkey’s Adjournment of Bankruptcy and the United States’ Chapter 11 Reorganization

Abstract

To build and maintain economic fortitude, the paradigm of fiscal success remains steadfast for both developed and developing nations in one specific area: bankruptcy law. History shows that robust economies incorporate reliable bankruptcy codes into their legal schemes so that small and large businesses thrive. However, because of the influences of varied stimuli including worldviews, cultural values, and politics, not all bankruptcy laws are created equal in their respective effectiveness, fairness, and influence. For example, the current United States Bankruptcy Code, ratified after nearly one hundred years of Congressional repeals and re-enactments is today a comprehensive, well-established legal scheme that efficiently permits debtors of varied status to file under its assorted Chapters. The United States’ Code seeks to successfully balance the rights of all parties involved in a bankruptcy, while further reassuring that the honest debtor receives a ‘fresh start.’ To compare, the Turkish Execution and Bankruptcy Code is still evolving in its structure to better equalize the treatment of debtors and creditors. This comparative paper first looks to the Turkish Bankruptcy Code and how it evolved, specifically in the area of adjournment of bankruptcy. To compare and contrast these two diverse legal structures, the study first analyzes the impacts of the 2003 and 2016 amendments of Article 179 in the area of adjournment, then proceeds to assess the requirements an entity must adhere to when seeking adjournment, and finally concludes with an in-depth analysis and comparison of United States’ Chapter 11 with the Turkish adjournment of bankruptcy. Following the analysis of the two Codes, the study closes with the authors’ recommendations of how to improve Turkey’s adjournment of bankruptcy.