06.08.2014
Appointment
Generally, appointed IPs administer insolvencies.
If the insolvency proceeding will commence as a result of a board resolution of the company (voluntary or consentual insolvency), the company may appoint an IP of its choice. If the insolvency will commence as result of a court decision, for instance by result of a lawsuit by creditors and or shareholders, than the court will appoint the IP.
There are several different types of insolvency proceedings. The most important ones are, (1) consensual or non-consensual insolvency, and (2) bankruptcy, which is considered insolvency. In bankruptcy situations and/or in insolvency proceedings commenced by a court decision, a tribunal of three IPs are selected from creditors.
The same IPs are able to deal with insolvencies of insurance companies.
Qualifications
There are no officially regulated minimum qualifications to satisfy in order to become an IP. Generally, people with accounting backgrounds are selected as IPs. In some cases however, lawyers or previous board members of the insolvent company may also be selected as IPs. The only requirement by law is that at least one of the selected IPs must be a citizen of The Republic of Turkey and must reside in Turkey. This is stated in the recently amended Commercial Code, Code no. 6102.
Other than the above requirement about residency, all other conditions are determined by policy and/or precedents.
In some cases, practitioners hold other higher qualifications than the minimum, especially when the insolvent company is a public company. Also better qualified IPs may be appointed if requested by the creditors and in voluntary insolvency situations, the company itself may appoint better qualified IPs.
Selection
If insolvency proceedings were ordered by court, then the court appoints IPs. If the company voluntarily entered insolvency status, the company may appoint IPs freely. If the company was declared 'bankrupt' the creditors nominate six people among them. Three of them are selected by the creditors and they form a committee and this selection is subject to court approval.
If that IP in question is not acting within the limits of the law, or if that person is not complying with the duties of the assignment, the creditors may submit a complaint against that person in the civil and criminal courts. In voluntary insolvency situations, the shareholders and the board (last board) of the company may terminate the assignment of the IP whenever they deem necessary and select a new IP.
Supervision
Courts and the shareholders of the company are responsible for supervising the IP 's performance but this depends on the type of insolvency.
Creditors can request the supervisor to examine particular aspects of a case.
Remuneration
Either the court ordering insolvency or the company board will determine the fees. There is no statutory scale. Unless the insolvent company is public and/or the insolvency proceedings require more attention due to the company being a holding company, the remuneration is generally low and can be deemed as a 'symbolic fee'.
IPs' remuneration does not have to be approved by the court or the creditors. The remuneration will be granted as a result of the creditors meeting, by court order or the company board.
Creditors may challenge the remuneration before the court that has appointed the IPs.
Regulation
Regulation of IPs is not available in Turkey.
Other Matters
The appointment and regulation of insolvency practitioners in Turkey is a neglected issue. Most developed countries follow some form of statutory regulation regarding the appointment of insolvency practitioners; however, Turkey lacks such a framework. This issue must be addressed.
