Companies facing financial pressure have options. When the right intervention is made at the right time with the right structure, most companies can stay on their feet, bring their debts under control and continue their operations. At Arısoy Law, we provide strategic legal support to companies, creditors and investors at every stage of the debt restructuring process.
Debt restructuring is not merely a legal process but a
multidisciplinary effort that requires negotiation, financial analysis and
strategic planning. We work in coordination with specialist financial advisors,
independent auditors and investment consultants. Our experience in managing
complex negotiation processes and our proven track record in multi-party
creditor negotiations form the foundation of our work in this field.
We have successfully managed restructuring processes across
a wide range of sectors, from textiles to energy, jewellery to industrial
manufacturing, retail to yacht manufacturing, involving debt levels ranging
from USD 25 million to USD 120 million.
The first and most critical step in debt restructuring is
sitting down at the negotiation table with creditors on the right terms. We
represent our clients in negotiations with banks, financial institutions,
leasing companies, suppliers and other creditors, developing sustainable
solutions for the restructuring of their debts.
We structure instruments such as maturity extensions,
interest rate reductions, repayment plan revisions, haircuts and debt swap
agreements according to our client's circumstances and commercial objectives.
In multi-creditor restructurings, particularly where bank loans and trade
receivables must be negotiated simultaneously, we manage the priority ranking
among creditors, security rights and voting mechanisms in our client's favour.
We also advise our clients in processes conducted under Financial Restructuring
Framework Agreements. Our aim is to establish a settlement framework that
enables our client to continue its commercial operations.
Concordat, the Turkish equivalent of court-supervised
reorganisation, is one of the most important legal instruments for maintaining
the operations of companies in financial distress. We represent our clients at
every stage of the process, from the preparation of the concordat application
and the drafting of the preliminary project to the management of the creditors'
meeting and court approval. During the concordat commissioner process, we
protect our client's rights against creditor objections and defend the
viability of the project from both a legal and commercial perspective.
Where a company is no longer sustainable, we stand by our
clients in bankruptcy and liquidation proceedings. Representation on either the
debtor or creditor side in bankruptcy cases, registration of claims with the
bankruptcy estate, objections to the ranking of claims and actions for the
annulment of dispositions (clawback/avoidance actions) form part of this work.
In liquidation proceedings, we advise our clients on the personal liability of
board members, compliance with BRSA regulations and the management of
obligations towards creditors. Whether the objective is rescue or liquidation,
we take the maximum protection of our client's rights as our guiding principle.
The financial difficulties of companies engaged in
international trade rarely remain within the boundaries of a single legal
system. Companies with creditors, assets or contracts across Europe, the Middle
East, South Asia or the United Kingdom require the simultaneous management of
multiple legal frameworks in their debt restructuring processes.
Through our Istanbul headquarters and London desk, we
provide services with lawyers qualified in both Turkish and English law in
restructuring processes arising from commercial relationships between Turkiye
and the United Kingdom. We manage the participation of investors and creditors
from European, Middle Eastern and South Asian jurisdictions in restructuring
processes in Turkiye, and work in coordination with local law firms in the
restructuring of Turkish companies' debts abroad. In cross-border restructurings,
it is not only legal technical competence that matters but also an
understanding of different legal cultures and business practices; striking this
balance is our strength.
Debt restructuring alone is sometimes not enough. The
structural issues underlying a company's debt burden must be resolved, its
business model reassessed and organisational transformation carried out.
We support our clients from both a legal and strategic
perspective in processes such as the simplification of group structures, the
separation of non-strategic business lines, the admission of new investors or
the reorganisation of partnership structures. By understanding the commercial
motivation behind each reorganisation decision, we conduct the legal process in
alignment with that motivation. The settlement of intercompany debt within
holding groups, capital increases and the establishment of new agreement
frameworks among shareholders form part of this work.
The sale of all or part of a company under financial
pressure carries dynamics that differ from a standard transfer transaction.
Time pressure, creditor approval processes, valuation uncertainties and the
transferability of existing contracts create risks specific to this type of
transaction.
At Arısoy Law, we act for both buyers and sellers in
distressed asset transactions. During the legal due diligence process, we map
the company's debt structure, security burden and litigation risks. In the sale
of assets of companies in concordat or bankruptcy proceedings, we structure the
transaction with due regard for creditor rights and legal procedures. We manage
multidimensional processes from start to finish, from the preparation of
collective settlement agreements with employees regarding employment claims in
factory closure processes to the simultaneous conduct of restructuring
agreements with banks and leasing companies. Our experience in mergers and
acquisitions practice is an advantage that comes directly into play in
distressed transactions.
The reorganisation of existing security structures in debt
restructuring processes has a direct impact on the success of the
restructuring. Creditors' security rights must be preserved while creating
sufficient room for the debtor to continue its operations. When this balance is
not achieved, a restructuring agreement that appears successful on paper
becomes unworkable in practice.
We advise our clients on the restructuring of security
instruments such as pledges, mortgages, guarantees, business pledges and
assignment of receivables. In multi-creditor restructurings, we structure the
sharing arrangements for securities and intercreditor agreements according to
our client's position, and ensure the correction of incomplete or defective
security registrations. For clients we represent on the creditor side, we
assess the adequacy of existing securities, structure additional security demands
and manage the enforcement of securities.
The signing of a restructuring agreement is not the end of
the process but the beginning of a new structure. Our experience demonstrates
that the lasting success of a restructuring depends on how rigorously the
post-agreement process is managed.
At Arısoy Law, we remain at our clients' side after the restructuring agreement enters into force. Monitoring the payment schedule, ensuring the fulfilment of security obligations, regular reporting to creditors and tracking compliance with agreement conditions are the fundamental elements of this process. We establish early warning mechanisms in the event of deviations from agreement conditions and manage the process when renegotiation with creditors is required. Our experience in restructuring processes lasting from 1 to 5 years has shown us time and again that this stage is not merely a legal obligation but a strategic commitment.
- Advised one of Turkiye's leading textile exporters on the
restructuring of debt in excess of USD 40 million through concurrent
negotiations with its lending banks and trade creditors over a period of
approximately two years.
- Advised one of Turkiye's leading textile finishing and
dyeing companies on the restructuring of debt in excess of USD 100 million with
its lending banks and trade creditors, in a process spanning approximately five
years.
- Advised one of Turkiye's major jewellery companies, with
operations in the gold and construction sectors, on the restructuring of debt
in excess of USD 100 million with its lending banks and trade creditors over a
period of approximately two years.
- Advised a footwear retailer on the restructuring of debt in
excess of USD 65 million over a period of one year.
- Advised a group of companies active in the energy, textile
and livestock sectors on the restructuring of USD 45 million of debt over a
period of approximately 18 months.
- Advised a yacht builder on the restructuring of debt in
excess of USD 25 million.
- Advised a leading cable manufacturer, ranked among Turkiye's
top 500 companies with an annual turnover in excess of USD 120 million, on the
closure of its manufacturing facility, including settlement agreements with its
entire workforce in respect of employment-related claims and restructuring
arrangements with its lending banks and finance lease providers.