Points of Comparison of Restructuring UK and Turkey · This chart provides a basic overview of key concepts under US, UK and Turkish restructuring and insolvency processes and is

Points of Comparison of Formal Restructuring Processes in US, UK and Turkey

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Our global Restructuring & Insolvency team has a deep

understanding of the local and cross border issues arising in

all types of restructurings and recoveries. The team is ideally

suited to today's business climate where financial

restructurings are rarely confined to one jurisdiction. With

restructuring and insolvency practitioners located across the

globe, we can mobilise teams quickly and seamlessly across

borders, time zones, markets and cultures to meet our

clients' needs.

We offer cutting-edge and innovative legal and strategic

solutions to complex cases. Our team regularly represents

secured lenders and other secured creditors, creditors'

committees, corporate debtors, investors, insurance

companies, equity holders and bankruptcy trustees in crafting

sound and practical solutions across practices and industries in

actual or anticipated financial difficulties.

Ian Jack

Co-Head of Global Restructuring & Insolvency Finance Department London +44 20 7919 1700 [email protected]

Debra Dandeneau

Global Restructuring & Insolvency Group New York +1 212 626 4875

debra.dandeneau @bakermckenzie.com

Muhsin Keskin

Head of Banking and Finance Istanbul +90 212 376 6453 [email protected]

Koray Söğüt Head of Dispute Resolution Istanbul +90 212 376 6422 [email protected]

mailto:[email protected]





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This chart provides a basic overview of key concepts under US, UK and Turkish restructuring and insolvency processes and is not intended to be exhaustive or to be relied on as a legal opinion or advice.

For questions and comments, please feel free to contact one of the team members focused on restructuring and insolvency.

Esin Attorney Partnership Baker McKenzie LLP

İsmail G. Esin +90 212 376 6451 [email protected]

Koray Söğüt +90 212 376 6422 [email protected]

Muhsin Keskin +90 212 376 6453 [email protected]

Erdal Ekinci +90 212 376 6447 [email protected]

Duygu Gültekin +90 212 376 6441 [email protected]

Ian Jack +44 20 7919 1700 [email protected]

Debra Dandeneau +1 212 626 4875 [email protected]

Michael Doran +44 20 7919 1790 [email protected]

Adam Farlow +44 20 7919 1514 [email protected]

Haden Henderson +44 20 7919 1711 [email protected]

Bevis Metcalfe +44 20 7919 1102 [email protected]

Geoff O'Dea +44 20 7919 1968 [email protected]

Simon Porter +44 20 7919 1970 [email protected]

Megan Schellinger +44 20 7919 1517 [email protected]














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Chapter 11 Administration Company Voluntary Arrangement (CVA)

Scheme of Arrangement (SoA)

Framework Agreement Concordat / Composition (Turkish Scheme of Arrangement)

INITIAL CONSIDERATIONS

1. Nature of process

Chapter 11 used to effect operational restructuring, deleverage balance sheet, and/or commence asset sale of the business as a going concern.

Insolvency Act process primarily used to effect a pre-packaged sale of the business or assets effected by administrators (i.e. external qualified appointees).

Insolvency Act process used primarily to effect debt-for-equity swap or deleverage balance sheet.

Companies Act process used for solvent or insolvent restructurings.

Essentially a contractual process binding on banks that signed the framework agreement (FA) produced by the Turkish Banks Association (TBA) and debtors that separately apply to enter the process.

Execution and Bankruptcy Code process used for solvent or insolvent restructurings.

2. Solvency requirement

Solvency not relevant for voluntary bankruptcy. Involuntary bankruptcy limited to entities that are not generally paying their debts as they come due.

Available for insolvent entities or those likely to become insolvent.

Available for solvent or insolvent entities.

Available for solvent or insolvent entities.

Available for insolvent entities or those likely to become insolvent. Not available if debtor has entered into bankruptcy proceedings.

Not available if creditors with more than 25% of aggregate claims have begun legal proceedings against the debtor.

Available for an insolvent company unable to pay due debts or unlikely to pay debts upon maturity. Creditors in a position to file for bankruptcy may also file for composition.

3. Requirement to demonstrate COMI ("centre of main interests")

No, but debtor must demonstrate that it has a domicile, place of business, or property in the US to be eligible to file.

If COMI exists elsewhere, creditors may ask the court to dismiss the case in favor of commencement of proceeding in other jurisdiction."

Yes. Yes. Debtor must have sufficient connection with England or Wales and be capable of being wound up under the Insolvency Act.In the case of foreign companies English Law governed loan will suffice.

Governing law of debt may be changed to English law to provide jurisdiction (where debt document so permits). No "bad faith" bar.

If process is combined with Administration, COMI must be in/shifted to the UK - not a particular obstacle in the case of financial holding companies.

Procedure only available to Turkish debtors. Furthermore, Turkish banks, financial leasing companies, finance companies, factoring companies, capital markets institutions, insurance and reinsurance companies, payment services and e-money institutions and system operators cannot benefit from the framework agreement as debtor.

Procedure only available to Turkish debtors.

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4. Is pre-pack sale possible?

Yes, by way of Section 363 sales or a prepackaged chapter 11 plan.

Yes. No, unless process is combined with an administration. Not applicable. Yes. The debtor can transfer all or part of its assets to the creditors (malvarlığının terki suretiyle konkordato).

5. Restructuring of both secured and unsecured claims?

Yes. Yes. No, secured and preferential creditors cannot be bound nor their rights altered without express consent.

Yes. Not a restructuring procedure to the extent that cannot write off debt without 100% creditor consent. Similarly, security rights cannot be impaired without individual secured creditor consent. Ability to change other terms of debt (unsecured and secured) with stipulated majority consent across relevant creditor group.

Yes. But the provisions of concordat process are different with respect to secured and unsecured creditors. For example, the debtor can negotiate and conclude a separate restructuring deal with its secured creditors.

6. Classification of creditors and shareholders

Only similarly situated creditors can be classed together for voting purposes, but plan proponent has flexibility. Secured and unsecured creditors are separately classified.

No classing of creditors. No classing of creditors. However, secured creditors not bound by outcome.

Affected creditors are separated into classes (classes are made up of creditor/members and subsidiaries of them) whose rights are not too dissimilar to allow them to consult on the proposed plan.

No. Secured and unsecured creditors are separately classified.

7. Required voting approvals by creditors and shareholders

Absent a "cram down," each class of impaired creditors and each class of impaired shareholders must accept the plan by 2/3 in amount and majority in number.

No voting of creditors. Approval of CVA requires: (i) 75% in value of those present and voting (excluding secured or part secured claims); (ii) approval is invalid if more than 50% in value of creditors who are not connected to the debtor vote against; and (iii) 50% or more in value of members must vote in favour.

Each class of creditors or members must accept the SoA by (i) 75% in amount and (ii) majority in number.

Approval by 2/3 in value of creditors in the Creditor Institutions Consortium (i.e., Turkish bank/financial institution creditors and Foreign Credit Institutions and International Organizations) who signed the FA and who have exposures to a debtor) required to approve specific restructuring agreement for particular debtor, and most other decisions.

Foreign credit institutions

Approval of the composition plan by creditors would require the affirmative vote of (i) half in number of the registered creditors that own a minimum of 50% by value of the claims subject to the composition plan; or (ii) one-fourth of the registered creditors that own two-thirds of the claims subject to the composition plan. The

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and international organizations authorized to extend credits to debtors under the laws of their home jurisdiction ("Foreign Credit Institutions and International Organizations") can join the financial restructuring process by signing the FA on a case-by-case basis without being subject to the Creditor Institutions Consortium's approval. Write down of debt requires 100% approval.

75% by volume and 30% by number to approve the accession of third party creditors which have not signed up to the FA, to approve the borrower's borrowing from those willing to lend and/or extending the duration of negotiations to 150 days.

90% by volume and 2 by number for additional lending.

voting right is available only for creditors affected by the composition project.

8. Ability to bind minority/dissenting creditors

The plan may bind a dissenting member of an accepting class if it pays the dissenter at least as much as it would have received in a chapter 7 liquidation.

To bind a dissenting creditor class, the plan must be fair and equitable and not unfairly discriminate against the dissenting class.

A dissenting class of secured creditors must

A plan is not necessary but a CVA or SoA can be proposed by the administrator who can also effect the sale of the business or its assets.

Dissenting creditors may be bound to the terms of the plan subject to requisite majority approvals in each class. Those with no economic interest need not be consulted.

SoA must be substantively fair, which is defined as a scheme that an "intelligent and honest man, a member of the class concerned and acting in respect of his interest might reasonably approve."

Dissenting, subsequent ranking creditors may be bound to the terms of the plan subject to requisite majority approvals in each class.

Per voting majorities above, no ability to bind dissenting creditors to any write off.

Per voting majorities above, limited ability to bind dissenting creditors for additional lending.

2/3 by value majority in relation to other matters will bind dissenting creditors who are signatories to the FA.

Dissenting creditors may be bound by the terms of the plan subject to requisite majority approvals.

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retain its liens and receive an amount equal to the present value of the assets securing the claim or the amount of its secured claim.

For an unsecured dissenting class, the plan must satisfy the “absolute priority rule.” This means that junior creditors and shareholders may not receive a distribution or retain an interest in the reorganized debtor. One possible exception is if the junior creditors or shareholders contribute "new value" under specific guidelines.

Consent of all classes of affected stakeholder required. Out of the money creditors (who would receive nothing by reference to an insolvency analysis) can be crammed down by combining a SoA with an Administration, restructuring in the money debt into the acquirer and leaving out of the money debt in the seller shell.

To invoke an Administration, COMI must be in/shifted to the UK.

Will not bind non-signatories.

9. Who can commence?

Voluntary proceeding may be commenced by the company at any time in accordance with authorization required by its organizational documents.

Involuntary proceeding may be commenced by three or more unsecured creditors if the debtor is not generally paying its debts as they come due.

Voluntary proceeding may be commenced by the debtor entity.

Involuntarily proceeding may be commenced by the debtor's directors, holder of a qualifying floating charge, or any creditor owed more than £750.

Process may be commenced by: (i) court order; or (ii) out of court by the filing of a series of prescribed documents on the public record.

Proceeding may be commenced by the debtor's directors, administrator, or liquidator.

Voluntarily proceeding may be commenced by the debtor.

On application to court for permission to summon meetings of classes of members/creditors, any shareholder, liquidator, or administrator can commence an involuntary proceeding.

Debtor - see row 2 above. Voluntary proceeding may be commenced by the company's board of directors at any time.

Involuntary proceeding may be commenced by creditors in a position to file for bankruptcy of the debtors.

10. Shareholder consent needed to commence proceeding?

Typically, no. Only to the extent required by the company’s organizational documents.

No. No. No. No, unless the articles of association require.

No, unless the articles of association require.

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11. Do directors have a duty to commence proceeding?

A company is not obligated to file for US bankruptcy upon discovering its insolvency; there is no director liability for failure to file.

As soon as there ceases to be any reasonable prospect of company avoiding insolvent liquidation, directors may incur liability for "wrongful trading" if they fail thereafter to take every step available to minimise the loss to creditors. The liability will not apply to actions taken by a liquidator or administrator. The risk can encourage directors to file.

The directors must explore this option as part of their general liability as a director.

The directors must explore this option as part of their general liability as a director.

12. Ability to consolidate group estates?

In limited circumstances, bankruptcy courts may authorize substantive consolidation of debtors' estates. It is considered an extreme remedy and generally only available where it is impracticable to disentangle the assets and liabilities of the different entities or where creditors can demonstrate that the entities held themselves out as a single economic unit and they relied upon that..

No. Group insolvencies are either coordinated by appointing identical administrators or under protocols.

Simultaneous administrations can be used to effect sale of the business or its assets across a group with the subsequent apportionment of sale proceeds between insolvency estates.

No, but can have inter-conditional CVAs (i.e., where approval of a CVA by all entities is a condition precedent to the CVA coming into effect).

English law guarantees of the debt to be restructured through a CVA can be compromised without placing the guarantors into a specific CVA, and regardless of whether those guarantors could have been placed into a CVA.

No, but can have inter-conditional SoAs (i.e., where approval of a SoA by all entities is a condition precedent to the SoA coming into effect).

English law guarantees of the debt to be restructured through a SoA can be compromised without placing the guarantors into a specific SoA, and regardless of whether those guarantors could have been placed into a SoA.

No. No.

13. Who can propose an actual plan?

Debtor (or if it fails to do so within four months (which can be extended), creditors. If a chapter 11 trustee is appointed, the debtor’s exclusive right to file a plan terminates.

For CVAs and SoAs, formally, debtor only, but creditors most usually have significant input (and majority consents will be required to approve).

Administrator

Both the debtor and the creditors.

Only debtors are obliged to propose a composition plan. However, the registered creditors have the right to participate in the negotiations for the composition project.

14. Court involvement

Proceeding overseen by a federal bankruptcy court for activities outside ordinary course of business. There is no court operational supervision for activities outside the ordinary course of business, but court authorized is required.

Limited court involvement, but the administrator may apply to the court for directions throughout administration.

Limited court involvement. The nominee must report to the court, which then decides whether to convene meetings to vote. Where the administrator or liquidator is the nominee, there is no requirement to report to court. CVA can be challenged in court for unfair prejudice or material irregularity.

Heightened court involvement in class meetings and approval of the SoA.

Court can refuse to convene class meetings or approve the SoA, even if approved by statutory majorities.

Scheme can be challenged in court at class meeting or sanction stage.

No.

Under the FA, an arbitral committee (AC) is created to resolve disputes arising from failure by creditors to perform obligations under the FA. This would not appear to extend to creditors failing to perform obligations arising under any FRC struck with a

Composition proceedings are overseen by the competent commercial court of first instance. The court also appoints a composition commissary whose scope of duties is decided by the court.

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particular debtor.

15. Management of Debtor/ Insolvency officer?

Debtor (board and management) represents its estate and cannot be removed except by court order under extraordinary circumstances, e.g., fraud or gross mismanagement.

Yes. Licensed insolvency practitioner acting as administrator.

Debtor (board and management) but Licensed Insolvency Practitioner appointed to act as nominee.

Debtor (board and management) but scheme supervisor often appointed to assist with SoA process.

Debtor continues to manage its affairs subject however to the terms of an undertaking it is obliged to provide to commence to process, which limits its ability to do certain things, e.g., dispose of assets and grant security.

Yes, concordat officers/commissary (konkordato komiseri). The scope of their duties and authorizations are determined by the court on a case-by-case basis.

16. Disclosure to Voting Creditors

A court-approved disclosure statement accompanies a plan, providing adequate information about a debtor's financial affairs to allow creditors to make an informed decision in voting on the plan.

No statement is required for 'pre-packaged administration' (i.e. a process set up so that it can be fully completed immediately after the administration commences) but a disclosure statement must be filed after the sale.

There are numerous statutory and insolvency rule requirements for the CVA proposal document, including setting out a comparison of the CVA outcome with liquidation outcomes, in addition to an extensive list of other prescribed matters required to be set forth in the proposal document.

There are limited prescribed matters that must be set out in the explanatory statement, giving considerable flexibility to those proposing the SoA. Broadly speaking, the explanatory statement must set out such information as an average creditor would expect to see or would require in order to make an informed decision such that they are extensive.

The FA specifies that any FRC entered into should legislate for information flows from the debtor to the creditor. Furthermore, with its application for restructuring, the debtor undertakes to provide financial and other information about its affairs and the other members of its group.

Without prejudice to the provisions of the Banking Law No. 5411 and Personal Data Protection Law No. 6698, the bank to which the debtor sends its FRP, and the leader bank, if appointed, may provide information to the Foreign Credit Institutions and International Organizations regarding the debtor's financial restructuring process pursuant to their written requests.

Adequate information about the debtor's financial affairs to allow creditors to make an informed decision in voting on the plan must be provided by the concordat officers. In practice, concordat officers prepare and submit financial reports regarding the financial status of the debtors so that the creditors and the court itself closely monitor the company's financial ability to comply with the concordat plan.

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EFFECT OF PROCESS

17. Does debtor remain in possession with continuation of incumbent management control?

Yes, see above.

A debtor in possession may conduct the ordinary course of its business without court approval and has the exclusive right to propose a plan of reorganization for 120 days, subject to further extension.

Court is required to approve most major business decisions (e.g., sale of assets and entering into secured financing).

Administrator assumes control. Directors' powers cease unless permitted with consent of administrators.

See row 15 above. See row 15 above. See row 15 above. The debtor may continue its regular activities under the supervision of the commissary. However, the court may require that the debtor obtain the commissary's approval for specific transactions or place the commissary directly in charge of the management of the debtor's commercial activities.

18. Stay/Moratorium Upon filing, enforcement of all pre-filing judgments and collection activities, foreclosures, contract terminations and repossessions of property of the debtor, etc., are automatically stayed, subject to certain statutory exceptions.

Yes, but does not prevent termination of most contracts.

No, unless debtor is a "small company" or in an administration process.

No, unless in an administration process or a moratorium scheme is used (which requires some of creditor class majority consents).

Yes, but subject to exceptions mentioned in Row 7. Additionally, will only apply for 90 days unless extended by CIC (75% by value and 30% by number approval). Moratorium will fall away if FRC not signed.

During the initial and definitive grace period:

No enforcement proceedings can be initiated or continued and no interim attachment and injunction decisions can be exercised, including the enforcement proceedings for public receivables.

The period of prescriptions and statute of limitations that can normally be halted due to the enforcement proceedings will be suspended.

Unsecured receivables shall not accrue interest unless the composition plan

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states otherwise.

-Should an assignment agreement for future receivables be executed between the debtor and the third party before the definitive period and the receivables subject to this agreement have arisen thereafter, the assignment agreements shall be deemed invalid.

Creditors secured with pledge may initiate or continue debt enforcement proceedings but cannot obtain any dispositive measure against the debtor or realize the sale of the pledged assets.

If a contract bearing importance in the debtors' commercial activities provides that the composition application would be deemed a violation of the contract, would be considered a just cause for termination or would accelerate the debts, such provisions shall not be enforceable. In other words, agreements cannot be terminated based on the composition application, even when

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the agreement allows.

The debtor may terminate a continuous contractual relationship that impedes the composition project upon the approval of the commissary and court.

The debtor may continue its regular activities under the supervision of the commissary. However, the court may require that the debtor obtain the commissary's approval for specific transactions or place the commissary directly in charge of the management of the debtor's commercial activities.

The debtor cannot establish pledges over its assets; provide suretyships; transfer its immovable properties or necessary assets for its operations; and/or establish any collateral over those assets without the court's permission. If the debtor violates this article, any transaction made would be deemed void.

19. Provision for debtor-in-possession

A chapter 11 debtor can obtain postpetition financing on a "super priority" basis

Insolvency Act empowers administrator to borrow post-petition but not on

No. No. Yes, to the extent of the security granted over previously unencumbered

No.

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super priority financing?

that also can "prime" other secured creditors if they are "adequately protected." As a practical matter, non-consensual priming rarely occurs.

super priority or priming basis absent secured creditors' consent.

Creditors whose support is critical to the administration process, including post-petition lenders, may be paid in full through administration by achieving priority "expense" status in the process (just behind senior secured creditors but ahead of other unsecured lenders).

assets. No priming security permitted without consent of pre-existing secured creditor whose rights would be affected.

20. Debt-to-equity swap (without shareholder consent)

Shareholder consent is not required so long as creditors are not receiving more than 100% recovery.

Yes, through pre-pack. Yes. Yes, to extent shareholder rights are to be varied.

No. No.

21. Third party releases

Non-debtor guarantors or other non-debtor parties may be released under certain circumstances through a plan.

Non-consensual releases are approved only if necessary for the debtor's reorganization.

No. In principle, release of third party guarantors can be obtained under the CVA subject to any challenges by the creditors that to do so amounts to unfair prejudice.

Yes, in principle releases of third party guarantors can be obtained as part of the SoA particularly where guarantees are provided under the terms of the facility documentation, the terms of which are being amended and pursuant to which the English court has jurisdiction.

Yes, subject to limits set out in Row 7.

No.

22. Recognition abroad

Yes, in accordance with domestically adopted version of UNCITRAL or other applicable conflict of laws principles and/or treaties for other countries.

Highly questionable as it does not operate as a collective insolvency proceeding subject to the supervision of a court.

No.

23. Extent of litigation/areas which attract litigation

Can be a highly litigious procedure

Majority of litigation centers around valuation and

Less litigious than Chapter 11

Commonly litigated matters:



ranking of claims



which class a creditor should be placed in

Less litigious than concordat.

N/A

Highly litigious procedure.


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entitlement of creditors to certain rights, such as makewhole premiums.

ranking of claims

proof rights

set-off issues

proof rights whether disclosure is adequate.

Identity of creditors

Unjust interim injunction decisions given by the commercial court regarding third parties; e.g., creditors

Authenticity of claims

24. Adoption of UNCITRAL Model Law on Insolvency

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Yes. Chapter 15. Yes. Yes. Yes. No. No.

25. Length, complexity

Section 363 sale - very quick.

A prepackaged plan can be as short as 45 to 60 days.

A “prenegotiated” plan can be as short as 90-120 days.

A "free fall" filing can be indefinite, sometimes lasting more than a year.

Pre-pack sale very quick.

Statutory limit of one year, can be extended by court order and thus process often exceeds one year.

Involves on-going but limited filing requirements.

Quick and efficient with few reporting obligations.

Often less expensive than formal insolvency procedures.

Often time-consuming and expensive as a formal court application and at least two court hearings are necessary.

Maximum of 150 to conclude an FRC Implementation. No time limit on how long implementation might take.

Very time-consuming and expensive as a formal court application.

In a nutshell, there are four main stages for the composition proceedings:

Preparations for composition application (approximately two to four weeks in practice)

Initial temporary period (three to five months)

Definitive period (12 months to 18 months)

Composition payment plan (may be several years - depends on the negotiations with the creditors and the agreed payment plan)

1 Question has relevance to recognition abroad as some countries (e.g., Switzerland) have acceded to the UNCITRAL Model Law ("Treaty Law") recognising foreign procedures under the Treaty Law only where

the foreign state in question has also acceded to the model law.

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26. Costs Costs can be material, especially in a “freefall” chapter 11 case. Debtor’s estate also must pay for the fees and expenses of the legal and financial advisors for an official committee of unsecured creditors.

Costs similar to those involved in normal course business sale.

Less than Chapter 11. Less than Chapter 11. Less than concordat. Costs material.

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OTHER FACTORS

27. Wrongful or insolvent trading restrictions and directors' liability

None except a "prolonging insolvency" tort that has been recognized only by a very small minority of courts.

"Fraudulent trading" claims may be brought where debtor trades with actual intent to defraud administrative creditors. Fraudulent trading is a criminal offense punishable by up to 10 years' imprisonment and/or an unlimited fine.

Court can require a director who engages in "wrongful trading" to contribute to the insolvency estate. Wrongful trading occurs when director(s) or shadow director(s) who conclude (or, should have concluded) there is no reasonable prospect of the debtor avoiding an insolvent liquidation, fails to take every step that a reasonably diligent person would take to minimize potential loss to the company's creditors.

Court may disqualify a person who engages in fraud or other breaches of duty from acting as a director for between one and 15 years.

No, unless an administration or liquidation follows.

No, unless an administration or liquidation follows.

Wrongful trading directors may be held liable.

Wrongful trading directors may be held liable.

28. Priority of Claims

The Bankruptcy Code prioritizes claims as follows:

secured claims (to extent of collateral value)

administrative expenses

Statutory order of priority:

fixed charges/mortgages

administrator's expenses, including

Order of priority determined by plan.

Order of priority determined by plan.

The Execution and Bankruptcy Code prioritizes claims as follows:

Secured creditors have priority in respect of collecting the proceeds of the sale of the secured assets, which in principle will be sold by the bankruptcy

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of the bankruptcy

unsecured, post-petition claims in an involuntary case

wage claims of employees

contributions to employee benefit plans

certain recent income, sales, employment or gross receipts taxes

unsecured claims

shareholder interests

those incurred under contracts entered into by administrators

preferential debts (primarily limited amounts due to employees and tax authorities)

a "prescribed part" (amount capped at £600,000 for unsecured creditors)

floating charge holders

unsecured creditors

deferred creditors

shareholders

administration as soon as possible.

Unsecured creditors will be paid in the following order:

Taxes and other government charges accrued in connection with the asset to be sold.

Employee or labor pension related claims and alimonies.

Claims of third parties whose assets are managed by the debtor under a custody or guardianship.

Claims prioritized under various laws.

Other unsecured claims.

29. Pension liabilities

A debtor may terminate its single employer pension plans through a "distressed termination" in bankruptcy, leaving the PBGC with an unsecured claim for the termination liabilities. The PBGC can force an involuntary termination, but rarely does.

Will automatically trigger a significant unsecured statutory debt under the Pensions Act for defined benefit pension schemes that are in deficit.

Will trigger requirement to enter into government backed Pension Protection Fund.

Will automatically trigger a significant unsecured statutory debt under the Pensions Act for defined benefit pension schemes that are in deficit.

Will trigger requirement to enter into government backed Pension Protection Fund.

Will not automatically trigger a significant unsecured statutory debt under the Pensions Act for defined benefit pension schemes that are in deficit.

Will not trigger requirement to enter into government backed Pension Protection Fund.

N/A N/A

30. Clawback Rule Preferences 90 days for non-insiders and one year for insiders.

Fraudulent transfers two to six years.

Preferences

(six months) for connected (akin to insiders) two years

Transactions at undervalue (two years) (unlimited time if fraud)

voidable floating charges (akin to US security) 12 months same to extent

Not applicable. Not applicable. Not applicable. Articles 277 through 280 of the Enforcement and Bankruptcy Code grant a bankruptcy receiver the right to challenge (by court process) and have set aside certain kinds of transactions executed by the debtor before commencement of the formal bankruptcy proceeding. By such means, the receiver can

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secures new money.

clawback payments made or reverse transactions entered into by the debtor prior to bankruptcy.

Three groups of transactions may be avoided, as follows:

transactions concluded within five years prior to bankruptcy that were intended to damage its creditors

transactions executed within the two years prior to bankruptcy made for no consideration, such as donations

certain transactions concluded within one year prior to the bankruptcy, specifically:

pledges given by the debtor as to the secured debt incurred

payments made other than with money or other common payment instruments

payments in relation to debt not yet due

the conferring of interests in [real] property for the benefit of third parties

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Points of Comparison of Restructuring UK and Turkey · This chart provides a basic overview of key concepts under US, UK and Turkish restructuring and insolvency processes and is