2016.ANA METIN ingilizce.01

As per Article 206/4 of the Law on Enforcement and Bankruptcy

numbered 2004, if the issuer goes bankrupt, unlike the covered bond

and sukuk holders

, the bondholders’ rank is subordinated to privileged

creditors, such as employees, the state, and other creditors determined

under the law. Therefore, unless the issuer, the controlling shareholder

of the issuer, or the underwriter (if any) provides an extra guarantee or

security to the bondholder, the chances are less likely that bondholders

will be able to recover their unpaid coupons and the principal.

Bondholders are characterized as mere creditors of the company so

they may only benefit from those provisions under Commercial Code

numbered 6102, as with any other creditor

. The Capital Markets Law

numbered 6362 does not provide any special rights to bondholders

other than those available for misrepresentations in the prospectus.

Unlike the former Commercial Code that granted bondholders the right

to convene general assemblies in certain matters, the new Commercial

Code does not include such opportunity

. Therefore, in the event of

bankruptcy, bondholders will claim their investments, either individu-

ally or collectively as there is no provision hindering them to act as a

group

. However, such lawsuit is not a class action, as it is only intro-

duced for legal entities, such as associations provided in Article 113 of

Code of Civil Procedure numbered 6100.

Current Regulatory Trends

As per Article 4/7 of Communiqué Regarding Debt Securities

numbered II-31.1 (“Communiqué”), the Capital Markets Board

(“CMB”) is entitled to request from the issuer a guarantee for payment

obligations given by a local bank or third party, or limit the sale to the

qualified investors, only. Despite such broad power, the CMB has exer-

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NEWSLETTER 2015

As per Article 59/3 and 61/3 of the Capital Markets Law, if the issuer goes bankrupt, the col-

lateral for covered bonds and sukuk holders, respectively, is not included in the bankruptcy

estate, and the bondholders have the privilege to benefit from the sale proceeds of the collateral.

The following articles of the Turkish Commercial Code will be relevant for the creditors:

202/1/c, 395/2, 474, 513/1, 530, 541/1, 549/1, 550, 551, 553, 554, 556, 557/1.

Erdem, Ercument

; Jouissance Shares For The Founders In The Turkish Commercial Code

available at

turkish-commercial-code-2/.

Pulasli, Hasan

p. 1732; Commentary on Company Law, 2

Edition 2014.