Effects Of The Concordatum Period On Pledgees 27 June 2025

However, if the related receivable is secured by a pledge, pursuant to Article 295/1 of the EBL, a proceeding may be initiated and continued through the monetisation of the pledged property. Although such proceedings may be carried out during the concordatum period, no protective measures may be taken against the pledged property, and the sale of the asset is prohibited.
 

An exception to this prohibition on sale is regulated under Article 295/2 of the EBL. If the pledged asset is not intended to be used by the debtor's business under the concordatum project, or if the asset is likely to lose value or its preservation would be costly, then, pursuant to Article 297/2 of the EBL, it may be sold with the opinion of the concordatum commissioner and the permission of the court.

From the proceeds of the sale, the pledgee is paid only up to the value of their security interest.
 

If the pledgee's claim exceeds the value of the pledged asset, the exceeding amount is considered an unsecured (ordinary) claim and is included within the scope of the concordatum project.

Allowing pledgees to continue proceedings for the conversion of pledged assets into cash during the concordatum period is an exception introduced to protect the right of security.

However, the prohibition of the sale of the pledged asset is a restriction designed to enable the debtor to continue operations and to preserve the value of the business, thereby increasing the likelihood of a successful concordatum plan.
 

At the same time, the exceptional provision allowing the sale of the pledged asset-where the asset is not to be used by the business under the concordatum plan, is likely to lose value, or is costly to maintain-aims to prevent the debtor from incurring unnecessary financial burdens and to avoid depreciation of the pledged property. Thus, a balance is sought between ensuring the continuity of the debtor's operations and protecting the interests of pledgees.