In accordance with Article 12 of Law No. 7343 on the Amendments in Execution and Bankruptcy Law and Certain Laws published in the Official Gazette dated 30 November 2021, Article 111/a, entitled "Granting of authorisation for sell to the debtor", was added to the Execution and Bankruptcy Law No. 2004 ("EBL"). In this regulation, the procedures and principles concerning the practice have been determined for debtors who have been granted the right to sell their seized goods.
The procedures and principles of the practice have been determined by the Ministry of Justice with the Regulation on Granting of Authorization for Selling to the Debtor in accordance with the Execution and Bankruptcy Law (the "Regulation"), published in the Official Gazette dated 28 May 2022. The details are set forth below.
Pursuant to Article 111/a of the EBL, the debtor is authorized to sell its seized goods.
The debtor may apply to the execution office where the execution file is located to request the authorisation that its seized property be put up for sale by the execution office, within 7 (seven) days from the date of notification of an expert or seizure report indicating the appraised monetary value of the goods.
The creditor, causing the seizure of the goods, shall not have any right of objection regarding the debtor's right to sell its seized goods with authorisation.
Once the appraisal is finalised, the director of the execution office shall cease the forced sale transactions and issue the Sample No.57 authorisation document specified in the annex of the Regulation for the sale of seized goods with consent, and serve it on the debtor. A period of 15 (fifteen) days shall be given to the debtor from the notification of the authorisation certificate issued for the sale with consent.
The debtor must notify the execution office about the buyer's name and surname, ID number, the title -if the buyer is a legal entity-, tax identification number, trade registry number, central registration system number, as well as the agreed price and the distinguishing features of the goods. For its part, the buyer must notify the office about his/her name and surname, ID number, the title -if it is a legal entity-, tax identification number, trade registry number, central registration system number, address suitable for notification, contact information, bank account information, as well as the agreed price and the distinguishing features of the goods, within 15 (fifteen) days.
The director of the execution office carries out the necessary operations for registration following the request of the consented sale of seized property, as recorded in the relevant registry. In order to determine the minimum price for the sale with consent, the director of the execution office shall ask whether the receivable from the priority rights of the creditor continues by providing the registered encumbrances of the seized good and, if it continues, the amount of the receivable.
In a sale with consent, the minimum sale price shall not be less than 90% of the appraised price or the sum of the receivables of the prior creditors secured by that good, whichever is more, and shall not be less than the sum of this amount and the follow-up costs incurred up to that stage of the execution file.
If the buyer who purchased the goods in this way deposits the sale price of the good into the bank account of the relevant execution office within the 15 (fifteen) day period given to the debtor, and the director of execution office determines that the conditions are fulfilled after providing the necessary information and documents, the file is immediately sent to the Execution Court ("Court") for a final decision on the sale.
The Court shall make a final decision regarding the acceptance or rejection of the sale, after examining the file within a maximum of ten days.
If the Court decides the rejection of the sale, the money deposited into the account of the execution office by the buyer who purchased the debtor's goods shall be returned to the bank account of the buyer declared to the execution office, within 3 (three) business days following the sending of the court rejection decision to the execution office. In addition, if the property is registered, the director of the execution office makes the necessary transactions for the cancellation of the annotation regarding the sale with consent request registered.
Where the Court accepts the sale and completion of the transfer and delivery of the goods, the ownership of the goods passes from the debtor to the buyer, and all seizure on the goods is removed. Transfer and delivery are carried out at the expense of the buyer. Where the goods subject to sale with consent are registered, the director of the execution office makes the necessary transactions for the registration process.
Unless the goods subject to sale with consent are delivered to the buyer or made ready for delivery, the price deposited by the buyer is not paid to the creditor.
Granting the debtor the authorisation to sell its seized goods, conducting the sale and depositing the sales price into the account of the execution office shall not remove the lien of the creditor. After the sale transactions are completed, upon the application of the execution office, the seizure on the goods shall be released if the Court definitively decides to accept the sale and to carry out the transfer and delivery of the goods.
With this practice, the debtor is given the opportunity to sell its seized goods to a buyer at a price higher than the execution office can sell. The creditor shall not lose its right since the seizure will remain until the handover proceedings are completed under the Court decision.