Preventive Restructuring for Businesses and New Trends

Preventive restructuring covers mechanisms that come into play before a business falls into payment distress — when financial distress signals are detected at an early stage. This model is becoming increasingly important both in terms of European directives and recent developments in Turkish law.

With legal regulations made in Turkey, the legal ground for preventive restructuring has been strengthened. However, in practice, awareness of these tools — among lawyers, financial advisors, and financial consultants — remains limited. The economic advantages of early intervention, i.e., higher value preservation for both debtor and creditor, are often missed.

What are the early warning signs? To what extent can it be understood that a business needs preventive restructuring? How can current legal tools be used for this purpose? While looking for answers to these questions, understanding where Turkey diverges from international developments is also of critical importance.