Category: Turkiye

Paksoy has advised DW Reusables on the acquisition of Turkish reusable transport packaging companies Etap Enjeksiyon from Ozgorkey Holding and Etap Dogan from Ozgorkey Holding and Daghan Unludogan. Herguner Bilgen Ozeke advised the sellers.

According to Paksoy, closing is expected by the end of 2021, pending regulatory approval.

DW Reusables is a Belgian producer of injection-molded reusable packaging such as returnable beverage crates, trays, and pallets.

Paksoy’s team included Partners Elvan Aziz and Togan Turan and Associates Tugcan Akalin and Kansu Aydogan.

Herguner Bilgen Ozeke’s team included Partner Kayra Ucer, Legal Consultant Suleyman Cengiz, and Associate Mey Akkayan.

Distribution of assets sometimes leads to disputes between heirs and cause undesirable consequences. In this respect, many people prefer to decide how their estate will be distributed by making testamentary dispositions while they are still alive. Hence, in order to eliminate possible conflicts between heirs or for other reasons, individuals may choose to plan their estate prior to their death, based on personal wishes. Today, more people than ever prioritize estate planning.

In this second article of the Turkish Law of Inheritance Series, we will examine some critical legal concepts regarding estate planning.

What Are Testamentary Dispositions?

Testamentary dispositions are legal transactions that comprise the wishes of legators that will have consequences after the death of the legator. They can be made in two different forms: wills and testamentary contracts.

What Is a Will and How Is It Drawn Up?

A will is a written document or a verbal statement that contains the last wishes and requests of the person [legator] and the principles of inheritance distribution. Wills are unilateral testamentary dispositions made with a declaration only.

A will can be made in the form of a public deed, in handwritten form or orally. The validity of a public deed depends on its notarization. On the other hand, drafting a will in the form of a public deed is not mandatory; a person can also write their will on a piece of paper or on another medium such as a notebook with their own handwriting. Also, a person can make a will through oral testament in specific extraordinary circumstances.

What Is a Testamentary Contract and How Is It Drawn Up?

A testamentary contract is a contract a person signs in vivo [while they are alive] to enter into force after their death. Testamentary contracts can either be positive or negative. In a positive testamentary contract, a legator is obliged to leave their inheritance or a certain property to the other party or a third party.

In negative testamentary contracts, a right of inheritance is abolished by the legator, and the heir partly or completely renounces their right of inheritance. Thus, they are also sometimes called “inheritance waiver agreements”.

What are the Differences Between a Testamentary Contract and a Will? What are the Advantages and Disadvantages?

Since a will is drawn up with the unilateral decision of the legator, a person can always withdraw it until their death. On the other hand, a testamentary contract cannot be unilaterally withdrawn except for specific cases since a testamentary contract is a bilateral legal transaction.

 While a testamentary contract is more difficulty to revert, since the heir is also a party to the transaction and their will is also manifested in the contract, testamentary contracts minimize possible conflicts that may arise following the opening of the succession. Unlike a will prepared solely by the legator, it is much more difficult for an heir to oppose a disposition they personally participated in and approved.

Moreover, it can be easily said that the testamentary contracts are safer in terms of formal requirements. Indeed, a testamentary contract must be made in the form of a public deed. The probability of loss, falsification of this disposition made with the participation of an official authority [notary] is very unlikely.

I. Is It Possible to Make a Contingent Will?

The legator may impose conditions for the testamentary disposition to come into effect or for the reversal of dispositions that had already come into effect. Such contingent dispositions are valid unless they are against the law or immoral. 

II. Is it Possible to Withdraw a Will/Testamentary Contract?

It is possible to withdraw both a will and a testamentary contract. A will is a unilateral instrument, which enables the legator to renounce it at any time. This renunciation may be made in the form of a testamentary disposition made later [a new will or testamentary contract], by destroying the will or by making a disposition inter vivos on the object of the testamentary disposition conflicting with the will.

On the other hand, unilateral renunciation of a testamentary contract is not possible, except for extraordinary cases. A testamentary contract, like any contract, can always be terminated through mutual agreement of the parties. Also, according to the Turkish Civil Code, [i.] if one of the possible reasons for disinheritance is present or [ii.] if a consideration [quittance] has been stipulated in the contract but was not fulfilled, a legator has the right to withdraw from the contract unilaterally.

III. Can the Legator Designate a Person to Whom the Inheritance Will Pass After the First Heir?

When the legator is designating a beneficiary or a testamentary heir, they may also want to determine the person or persons the relevant portion of the inheritance will succeed to after the designated person. In this respect, the possibility of designation of a reversionary heir is foreseen in Turkish law.

The legator may make a disposition to pass the inheritance first to the prior heir and then to the revisionary heir through the determination of a prior and a revisionary heir. However, it is not possible to make a disposition regarding whom the inheritance will pass to after the revisionary heir.

IV. Can the Legator Determine How the Assets Will Be Distributed Without Making a Testamentary Disposition on Inheritance Shares?

A legator can make a testamentary disposition regarding the percentage and the method of distribution as well as make arrangements about which property/right will be given to whom. For example, if a legator wrote “I am passing my summer house in Bodrum to my daughter Ayşe” in their will, in principle, this statement is not interpreted as if the summer house is passed down to his daughter in addition to her statutory inheritance share; but as a method of distribution which means the assets will be distributed in a way the summer house will pass to the daughter as a part of her inheritance share.

Such distribution rules set in testamentary dispositions prove to be very beneficial in terms of protecting assets and minimizing conflicts that may arise in the distribution process since in cases where an agreement cannot be reached in regard to non- monetary assets such as a car, a home etc., are sold and the distribution is made in terms of money generated from the sale of the asset.

V. Is it Possible to Draw Up an Estate Plan Covering Several Generations? 

As Turkish law allows only one degree of successive heirdom, it is impossible to appoint multiple revisionary heirs covering more than one generation. Even family foundations, which are permitted by the Turkish Civil Code, cannot be designated as a revisionary heir in this way

Therefore, a legator who wants to draw up an estate plan covering several generations, could expand the possibilities in terms of estate planning through transactions in vivo such as arranging a “Family Constitution”, in addition to designating prior and revisionary heirs.

VI. What is a Family Constitution?

A family constitution is a set of rules that define and regulate relationships family members have established and will establish with each other and with the family business. Family constitutions, which are frequently adopted in companies publicly known as family businesses, mostly determine the principles and procedures of the influence of the family on the management of the company. Family constitutions are binding like any atypical/innominate contract, as they are not specifically regulated in the Turkish Code of Obligations. 

VII. What Role Can Family Constitutions Play in Estate Planning?

Family constitutions play an important role in estate planning, while also contributing to the sustainability of family businesses.

In a family constitution, founders and majority shareholders of family companies can make dispositions on many issues that are out of scope for testamentary dispositions. Therefore, continuity of the family company and the family assets is ensured for a long term.

By M. Tarik Gueryuz, Partner, and Aziz Can Cengiz, Junior Attorney, Guleryuz & Partners

Turkish lawyer Seyfi Can Kandemir has joined Morgan Lewis’ London office as Partner.

Before joining Morgan Lewis, he spent almost 12 years with White & Case.

According to Morgan Lewis, Kandemir focuses on international project finance transactions, particularly within the infrastructure, power, mining, and oil and gas sectors. He “advises sponsors, developers, multilateral lending and development agencies, international financial institutions, export credit agencies, and commercial banks in project and international finance, including corporate and hybrid style financings and concession financings. His representations span developed and emerging markets throughout Europe, the Middle East, Africa, and North America.” 

“As worldwide governments look to stimulus plans, Seyfi Can’s broad geographical practice is important to help inform and guide our global clients in their project finance transactions,” said Morgan Lewis Chair Jami McKeon. “His focus on the international energy and infrastructure sector, including in emerging markets, will be key as they rebuild and recover from the pandemic.”   

“We are delighted to welcome Seyfi Can in London,” said Frances Murphy, Managing Partner of the London office. “His practice is a great fit with our focus on international energy and infrastructure matters across a range of practice areas, including corporate, finance, and litigation.” 

On August 23, 2021, CEE Legal Matters reported that GKC Partners had advised Yemeksepeti – the Turkish subsidiary of Delivery Hero, on its acquisition of Turkish online shopping platform Marketyo Bilisim Teknoloji A.S. CEE In-House Matters spoke with Deniz Ozkan Ergun, Senior Manager, Head of M&A Legal (LATAM & MENA) of Delivery Hero to learn more about the acquisition.

CEEIHM: To begin with, tell us a bit about Yemeksepeti and Delivery Hero.

Deniz: Delivery Hero is a leading multinational online food-delivery service based in Berlin, Germany. It operates in more than 50 countries in Europe, Asia, Latin America, and the Middle East. DH went public in 2017 and became a DAX entity, the leading stock market index in Germany listing the largest 30 companies trading on the Frankfurt Stock Exchange, in 2020. Apart from online food delivery, DH is a major player in emerging new markets including e-commerce worldwide. Yemeksepeti is a Turkish online food-delivery company, which became part of the DH group in 2015.

CEEIHM: Your company recently acquired the Marketyo platform. What attracted you to the platform?

Deniz: Marketyo is an online shop platform providing local supermarkets with the opportunity to move their business online. We acquired Marketyo recently this year through Yemeksepeti. The Yemek team has been involved in the strategic planning and execution of the deal. Both the DH and Yemek teams were particularly impressed by the infrastructure and platform Marketyo has built and their vast amount of technical capabilities that we can leverage in Yemek’s experienced hands.

CEEIHM: What is your plan for the platform, following the acquisition?

Deniz: The Yemek team recently launched a new platform, Mahalle, a quick commerce platform aiming to deliver anything from local stores at record speed. We plan to integrate Marketyo into the Yemek ecosystem, ensuring the continuous connection of our users and partners via our platform.

CEEIHM: What was GKC Partners’ mandate on the deal?

Deniz: GKC Partners acted as our main legal advisor on the deal and advised us starting from the very beginning of the due diligence, throughout negotiations of the transaction agreements, as well as, signing and closing of the acquisition.

CEEIHM: What made you choose GKC Partners as your advisor?

Deniz: We decided to work with GKC Partners based on their experience, and dynamism. Emre Ozsar, Tolga Tezel, and the entire deal team proved us right in our choice (with an extra bonus: good spirits at all times!). From the moment we met, they understood DH’s vision and approach to matters in the deal and very quickly adapted to our expectations and style.

 

Originally reported by CEE In-House Matters.

Paksoy has advised the Landis+Gyr Group on the acquisition of Luna Elektrik Elektronik Sanayi ve Ticaret. Cukur & Yilmaz reportedly advised the seller, Mustafa Karabagli.

Closing is expected by the end of 2021, pending regulatory approval.

Ladis+Gyr is a provider of integrated energy management solutions. Luna is a provider of smart metering devices for electricity, water, and heat and associated software solutions, with headquarters in Izmir, Turkey.

Paksoy’s team included Partner Nihan Bacanak and Associate Meric Sacak.

On August 11, 2021, CEE Legal Matters reported that BTS & Partners had advised 500 Startups and Qnbeyond Ventures on its investment in Ango AI. CEE In-House Matters spoke with Enis Hulli, General Partner at 500 Startups, to learn more about the deal.

CEEIHM: To begin with, tell our readers a bit about 500 Startups.

Enis: 500 Istanbul is a EUR 50 million early-stage VC fund, under the broader 500 Global umbrella, focused on defensible technology companies created by Turkish and Eastern European teams. The fund’s mission is to back seed-stage companies targeting sizeable markets and help them scale globally. Over the past 5 years, we’ve invested in 45 companies from the region, out of which there is 1 unicorn, 1 soonicorn, and 5 companies valued at over USD 100 million. These companies currently generate more than USD 350 million in annual revenue and employ about 3,000 people.

CEEIHM: Your fund recently invested in Ango AI. What attracted you to the target?

Enis: Ango is a data annotation and labeling platform with an annotation management tool and a vertically integrated marketplace with expert annotators. We are still at the infancy stages of AI/ML and we’ll see a transformation in our everyday software tools which will all be re-developed with AI/ML at their core. Ango aims to benefit from this transformation, by optimizing for speed and specializing in high value-added verticals that require sophistication. Ango aims to position itself as the fastest training data delivery platform by focusing its resources around AI assistance and excelling in human-computer interface technologies. The vision is to utilize the high-quality talent and cost advantages around MENA and Central Asia providing next-day delivery to its customers and also creating impact in the region by educating and employing thousands of annotators.

CEEIHM: What is your plan for Ango AI, following the investment?

Enis: Ango is led by two co-founding brothers, Gokhan and Gokalp, with engineering degrees from top universities in Turkey, and prior startup, product management, and software development experience. Both with deeply technical backgrounds, they complement each other well on all aspects of the business, with Gokhan driving the broader vision, and Gokalp leading the commercial aspects of the business. Their plan is to leverage the high quality of talent in Turkey and become a vertically-focused domain-specific data labeling platform with an emphasis on serving customers that are tackling the toughest AI problems in industries such as health care, manufacturing, and logistics. 

CEEIHM: What was BTS & Partners’ mandate on the deal?

Enis: BTS has advised us throughout the process from the beginnings of our early interaction with the company, all the way to post-closing. Apart from conducting the legal due diligence and making sure that the company has taken the necessary measures regarding all of its contracts, BTS also helped us identify potential issues around data sharing and data compliance.

CEEIHM: What made you choose BTS & Partners as your advisor?

Enis: We have a long-standing relationship with BTS and work with them closely for all of our investments, spanning from the US to Europe and Turkey. They always respond in a fast manner and understand our approach with regards to the investment to be able to almost negotiate and finalize open items on our behalf. 

Originally reported by CEE In-House Matters.

Turunc has advised Bogazici Ventures on its USD 430.000 investment into Fiber Games. Tevetoglu reportedly advised Fiber Games.

Fiber Games is a development studio focused on hyper-casual games.

According to a Bogazici Ventures press release, “the gaming industry in Turkey with over $1 billion in annual export revenue, continues to grow every day. Bogazici Ventures contributes to the growth of the ecosystem by investing in technologies that can scale rapidly in international markets through its BV Growth fund, which invests in Gaming, Fintech, Retail Technologies, and Digital Health.”

Turunc’s team included Managing Partner Kerem Turunc, Senior Attorney Yasemin Kerestecioglu, and Lawyers Beste Yildizili Ergul, Selay Berfin Turgut, and Canberk Taze.

KP Law has advised Arena Bilgisayar on the due diligence for its acquisition of Brightstar Turkey. Reportedly, Esin Attorney Partnership advised Arena Bilgisayar on the acquisition of Brightstar.

Arena Bilgisayar is a Turkish technology provider active in IT and consumer electronics. Brightstar Turkey is a subsidiary of the American technology distributor LikeWize Corp.

KP Law’s team included Managing Partner Onur Kucuk, Partner Ozge Tuncel, and Associates Esra Agic and Ege Erdogan.

Editor’s note: After this article was published, Esin Attorney Partnership confirmed it had advised Arena Bilgisayar on the acquisition. The firm’s team included Partner Caner Elmas, Senior Associate Mehmetcan Atasoy, and Associate Sam Gizem Sozer.

Transfer of shares to a third party may cause harm to the existing shareholders and create undesired consequences for them. For example, share transfer may result in the entry of an undesired third party into the entity as a shareholder. Therefore, shareholders may require strict measures to be taken for protecting the corporate structure of the entity, preventing the entry of undesired third party to the entity, preventing deadlock when reaching a decision, preventing the sale of company’s shares to its competitors, protecting the rights of the minority shareholders, etc.

As per the general principle, shareholders are free to transfer their shares to third parties without any restriction. However, freedom of transferring shares can be restricted either by the provision of the Turkish Commercial Code No. 6102 (“TCC”) or the articles of association of the companies. According to Article 490 of the TCC, the shareholders holding registered shares can transfer their shares without being subject to any restriction unless otherwise is regulated under either the TCC or the articles of association. In addition to the share transfer restrictions determined under the TCC or the articles of association of companies, the shareholders may execute an agreement to govern the relations among shareholders and decide on some additional restrictions (for example; options) to obtain more protection because it is not always possible to reflect all rights and obligations of the shareholders to the articles of association because of the regulatory bodies. In this article, we aim to explain the general concept of options under Turkish law.

I. Options

While regulating the relationship among the shareholders, the shareholders usually prefer to have option rights for future (for example; call options) in order to restrict transferring the shares easily to third party. As per the Turkish corporate law perspective, options are legally enforceable and valid in line with the law of contracts. However, it is important to mention that they are not regulated under the TCC. Option rights can be legally enforceable if it is agreed by the parties in a contractual relationship. Accordingly, options rights are usually regulated under shareholders’ agreement, option agreement or share purchase agreement. In case of a breach, the provisions of the Turkish Code of Obligations No. 6098 will be applicable to resolve the dispute.

The Right of First Refusal

The shareholders holding the right of first refusal are entitled to purchase any shares if any one of the shareholders desires to sell her/his shares. In accordance with the right of first refusal, the shareholder who wishes to transfer her/his shares to a third party is obliged to notify the other existing shareholders first and offer them purchase of the shares. In practice, the right is granted on the condition that the selling shareholder must set a price for the shares subject to the acquisition after negotiating with a third party and must offer the shares to the existing shareholder holding such rights on the same terms including the price. Accordingly, the right holder shareholders will be able to acquire the shares on the same terms with the third party.

Pre-Emptive Purchase Right

The main difference between the right of first refusal and pre-emptive purchase right is that there must be an agreement between the selling shareholder and the third party regarding the sale of the shares in the pre-emptive purchase right. The shareholder holding such right will be able to purchase the shares of the shareholder who planned to sell her/his shares to third party by a unilateral declaration.

Call Option

Provided that the call option is granted to the shareholders through shareholders’ agreement, the shareholders holding the call option are entitled to purchase the shares of the selling shareholder in whole or in part at a price pre-determined by the parties.  By exercising the call option, the beneficiary shareholder will be able to exit from the company after a certain period of time or upon the occurrence of a certain event. Also, such option can be used as a contractual penalty in case of breach of the contract. Parties may decide on the exact price of the shares subject to the acquisition beforehand or they may agree on a method to calculate the price of shares. Once the parties determine to have call option right, the beneficiary will be entitled to use this option by unilateral declaration and the other parties will be obliged to sell their shares in whole or in part at a price that is already determined or can be calculated by a pre-determined formula.

Put Option

The put option grants the shareholder the right to sell his/her shares in whole or in part at a pre-determined price. Parties may decide on the exact price of the shares subject to the acquisition beforehand or they may agree on the calculation method for the price. Once the parties determine to have a put option right, the beneficiary will be entitled to use this option by unilateral declaration and the other party will be obliged to make an agreement that is the subject of the put option right.

Tag Along Option

As per the tag along option, the shareholder is obliged to sell her/his shares under the same conditions, given that another shareholder decides to sell his/her shares. Shareholder intending to sell her/his shares to a third party offers to the other shareholders the opportunity to be a part in the sale. Main aim of this option is to protect minority shareholders and allowing them to benefit from the sale.  In case that a third party wishes to acquire the shares of the shareholders to whom such option is addressed to, the tag along option grants the other shareholder who hold this right with the option to sell under the same condition. The purchasing party purchases the same amount of shares, although not from the same shareholder, but from all of the shareholders exercising their rights to participate in the transfer.

Drag Along Option

In case of drag along option, the shareholder has the right to force other existing shareholders to jointly sell their shares under the same terms and conditions including the price to the third party intending to purchase the shares when her/his own shares are being sold to the third party. Shareholders who are address of the drag along options will be obliged to sell along with the right owner upon his/her request.

II. Conclusion

Even though shareholders are free to transfer their shares to third parties as per the general principle under Turkish Law, such transaction may also result in negative consequences for the remaining shareholders. Therefore, in addition to the share transfer restriction regulated under the TCC and the articles of association, shareholders would like to have additional protection while regulating the shareholding relationship among them. While regulating such relationship, they prefer to use tools such as call and put options, tag along and drag along options, the right of first refusal and pre-emptive purchase right. These options and rights are considered valid and binding with regard to the law of contracts.

By Gonenc Gurkaynak, Partner, Nazli Nil Yukaruc, Partner, and Isil Ertekin, Associate, ELIG Gürkaynak Attorneys-at-Law

BTS & Partners has advised Eczacibasi Group’s corporate venture capital arm Eczacibasi Momentum on its investment in Virasoft Software Inc. Bircan Law reportedly advised Virasoft on its Series A financing round.

Virasoft is an AI-based digital pathology solutions provider. According to BTS & Partners, “this Series A round [was] led by Eczacibasi Momentum alongside existing and new investors Turk Telekom Ventures, Ak Portfoy, Turkiye Kalkinma Fonu, Acibadem Healthcare Group, Acibadem Universitesi, M. Selim Kondu, Burak Uzel, Bedi Turgut Uzel, and Fatma Fatos Ozbas.”

BTS & Partners’ team was led by Partner Okan Arican and included Senior Associate Erdem Aslan and Associate Orhan Deniz Topak.