Our Thesis on Commercial Pledges and Consequences Thereof In terms of Enforcement Law has been studied under three main headings. These three main headings are the concept of commercial pledges, the commercial pledge contract and its provisions, and the consequences of commercial pledges in terms of enforcement law. The concept of commercial pledge has been evaluated part by part, and commercial enterprise and craftsman’s enterprise concepts have been examined in the first place, followed by the examination of the concept of the right of pledge, and finally, the legal nature of a commercial pledge. Within this frame, the subjects examined include (i) the commercial enterprise and craftsman’s enterprise in terms of the following characteristics: the purpose of generating income, continuity, exceeding the limit of a craftsman’s activity, and independency, (ii) the right of pledge in terms of the following characteristics: subsidiary obligations, publicity, protection of trust, significance, indivisible nature of a guarantee and priority, (iii) the legal nature of commercial pledges in terms of the following characteristics: being an absolute right, real right, and subsidiary right, the possibility of pledging of individual elements separately.
Under the heading, the commercial pledge contract and its provisions, the subject, parties, scope and establishment of a contract have been studied. It has been determined that parties to the contract are the pledgor (pledge debtor) and pledge (pledge creditor), and the contract covers the trade name and business name, movable business installations and industrial rights. With regard to provisions, the rights and obligations of the parties, the application of mortgage provisions to the commercial pledge, and jurisdiction for disputes arising out of the contract constitute the provisions of the contract. A commercial pledge shall terminate by the conversion of the pledge into cash when the enterprise that is the subject of the pledge completely ceases to be existing, or when the receivable guaranteed by the pledge terminates, or when the register of the commercial enterprise is cancelled, or when the debt is not paid.
Under the heading, consequences of a commercial pledge in terms of enforcement law, the conversion of a commercial pledge into cash has been studied in terms of lex commisoria prohibition, the necessity to initiate executive proceeding through conversion of a pledge into cash, and the possibility to establish a precautionary attachment.
Followed by the heading, conversion of a commercial pledge into cash, comes the study on executive proceedings through conversion of a chattel mortgage into cash in general. The Law on Commercial Pledges refers to the Executive and Bankrupt Law except under those circumstances that are specific to commercial pledges when a chattel pledge is converted into cash. For this reason, the authorized executive office, request of executive proceedings and procedures to be followed by the executive office in case of executive proceedings without a court order through the conversion of a chattel mortgage into cash, and the finalization of executive proceedings have been examined taking into consideration the exceptional cases caused by a commercial pledge. A request for executive proceedings and its contents in case of executive proceedings with a court order, which is different than those of executive proceedings without a court order, when the receivable or the right of pledge of the creditor whose receivables has been guaranteed by a chattel mortgage, or both have been established by a court order, or a document that is in the nature of a court order, has been studied. That’s because it should be noted that the principle in proceedings through the conversion of a pledge into cash is to initiate executive proceedings without a court order. Under the heading, conversion of a pledge into cash, subjects studied include sales request and period, method of sale, sharing of monies and pledge deficit certificate, which are common to both cases after the executive proceedings are finalized by the conversion of the pledge into cash.