NEWSLETTER-2019-metin

54 NEWSLETTER 2019 in a spin-off. In this article, secondary liability of the companies that participated in a spin-off will be examined. Secondary Liability As explained above, in the event of a spin-off within the scope of the TCC, the receivables and securities of the creditors of the companies participating in a spin-off transaction may be endangered for various reasons. In order to eliminate such inconveniency, a two- degreed liability system is foreseen. In this context, Article 176/1 of the TCC, contains a provision that states “ In the event that a company, allocated with a debt through spin-off agreement or plan, which is primarily responsible, does not fulfill the receivables of the creditors, the companies participated to the spin-off shall be jointly liable as the secondary liable companies. ” Through such provision, the legislator, stipulates a joint liability for companies participating in a spin-off, in other words, the companies in which the assets are subjected to spin-off are distributed for the case which primarily liable company cannot fulfill the debts allocated to it. The purpose herein is to grant an additional opportunity to the credi- tors in case the debt in question cannot be fulfilled by the company which is primarily responsible, i.e. the company that the respective debt is allocated to. In this respect, it is not possible for the creditors to claim their receivables from secondary companies prior to claiming the same from the primarily liable company. Additionally, the respective receivable should not be secured in order to enable the creditor to claim its receivable from the secondary liable company. Although there is no reference in such condition to Article 175 of the TCC, this condition is deemed related to collaterals granted through the spin-off process in the doctrine. In addition to the above-explained two conditions, Article 176 also requires the primarily liable company to: • Be bankrupted; • Be in the concordat process;