Top Turkish shoe retailer gets stay of execution from creditors
Leading Turkish shoe retailer Hotiç won a stay of execution from bankruptcy for one year, Karar newspaper reported, citing a court decision.
The commercial court in Istanbul ruled that Hotiç could continue operations, rejecting appeals from creditors to liquidate the company, Karar said. The company owes a total of 400 million lira ($76 million) to almost 200 creditors, it said.
Three experts appointed by the court will continue to supervise the company’s operations, producing monthly reports, the newspaper said. The court extended the experts’ terms in office from an initial three months, which has now been completed successfully.
Hotiç, an 80-year-old company with 150 retail outlets across Turkey, applied for protection from creditors on Aug. 31 citing difficulty in making short-term financial obligations after interest rates surged because of a weaker lira.
Lawyers representing creditors argued to the court that Hotiç had overvalued its brand name at 408 million liras. The real value was 150 million liras, they said.
Hotiç’s board members resigned en-masse two weeks before the Aug. 31 court hearing and left the firm in control of one individual, who they named as E.Ç., the lawyers said, according to Karar. The owners had also sought to shift capital from the company to a related entity, they said.