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Selling Property of the Debtor under the Russian Bankruptcy Law
09.04.2019

Selling Property of the Debtor under the Russian Bankruptcy Law

The procedure of selling property of the debtor under Russian Bankruptcy Law

(Series publications about Russian Law Aspects of Insolvency)

Within ten working days from the date of the inclusion of data on the results of an inventory check of the debtor's property into the Comprehensive Federal Register of Data on Bankruptcy the bankruptcy creditor or an authorised body are entitled, if the rate of claim of the bankruptcy creditor or the rate of claim of the authorised body exceeds two per cent of the total amount of the claims of bankruptcy creditors and authorised bodies included into the register of creditors' claims, to send to the bankruptcy receiver a demand to recruit an appraiser citing the property to be appraised.


Within two months as from the date of receiving such claim the bankruptcy receiver is bound to ensure the appraisal of the cited property on account of the debtor's property.


A report on the appraisal of the debtor's property is subject to inclusion by the bankruptcy receiver to the Comprehensive Federal Register of Data on Bankruptcy within two working days as from the date of receiving a copy of this report in the electronic form.
A repeated appraisal of the property of the debtor in respect of which a claim has been earlier raised for making an appraisal in compliance with this item shall be made, if bankruptcy creditors or authorized bodies defray the cost of making such appraisal.


Within a month as from the end date of an inventory check of the debtor's enterprise or of an appraisal of the debtor's property (hereinafter referred to in this article as the debtor's property), if such appraisal has been conducted on demand of the bankruptcy creditor or of the authorised body in compliance with  Federal Law, the bankruptcy receiver is bound to present to a meeting of creditors or to a creditors' committee for endorsement an offer to sell the debtor's property including data on the composition of this property, on the time for its sale, on the form of sales (auction or tender), on the terms of a tender (if the enterprise is to be sold by way of holding a tender in compliance with the legislation of the Russian Federation), on the form of bidding as regards the price of this property, on the initial selling price thereof, on the mass media and Internet sites where it is planned accordingly to publish and insert an announcement of this property's sale, on the time of publishing and inserting the cited announcement.


If within two months as from the date of presenting by the bankruptcy receiver to a meeting of creditors or to a creditors' committee an offer to sell the debtor's property a meeting of creditors or a creditors' committee does not endorse such offer comprising data on the composition of this property, on the time for its sale, on the form of sales (auction or tender), on the terms of a tender (if the enterprise is to be sold by way of holding a tender in compliance with the legislation of the Russian Federation), on the form of bidding as regards the price of this property, on the initial selling price thereof, on the mass media and Internet sites where it is planned accordingly to publish and insert an announcement of this property's sale, on the time of publishing and inserting the cited announcement, the bankruptcy receiver is entitled to file with an arbitration court a petition for endorsement of the procedure for, time and terms of selling this property.
A ruling of an arbitration court on endorsement of the procedure for, time and terms of selling the debtor's enterprise may be appealed against.
If in the course of the winding up circumstances occur due to which there is a need for changing the procedure, term and/or conditions of the sale of the debtor's property the winding-up receiver shall present proposals for such changes to a meeting of creditors or the creditors' committee for confirmation.
After the completion of the stock-taking and appraisal of the debtor's property the winding-up receiver shall start selling it. Proceeds from the sale of the debtor's property shall be included in the composition of the debtor's property.


When the enterprise is being sold alienation shall extend to all types of property intended for the pursuance of entrepreneurial activities, for instance, land plots, buildings, houses, installations, equipment, implements, raw materials, products, things in action, and also rights to the means of individualisation of the debtor, the debtor's products (works and services) (commercial designation, trademarks and service marks) and other exclusive rights belonging to the debtor, except for the rights and duties that cannot be assigned to other persons.
When the enterprise is being sold in accordance with the present article the debtor's money obligations and compulsory payments shall not be included in the composition of the enterprise, except for the debtor's obligations that have come into being after the acceptance of the application for deeming the debtor bankrupt, and may be assigned to the buyer of the enterprise.


The sale of the enterprise shall be carried out by means of a public sale in the form of an auction, except for the property which is sold out by tender.
The sale of the enterprise shall be done by means of a public sale, except for cases when the composition of the enterprise includes property which is according to the legislation of the Russian Federation is deemed restricted-transaction property. In this case the sale of the enterprise shall be carried out by means of a closed sale open only to the persons which under a federal law are entitled to own or otherwise possess the restricted-transaction property.
When a cultural heritage item (a monument of history and culture) of the peoples of the Russian Federation is being sold out the conditions sine qua non of the tender also include buyers' obligation to observe the restrictions imposed according to Russian Federal Law No. 73-FZ of June 25, 2002 on Cultural Heritage Items (Monuments of History and Culture) of the Peoples of the Russian Federation on the use of the given cultural heritage item, the requirements governing its preservation, content and use, the provision of access to the given cultural heritage item, the preservation of its appearance and interior (if the interior is the subject matter of protection), the observance in respect of the given item of the requirements set out in the protection document, the observance of the special regime of using lands within the protection zone of the given cultural heritage item and the conclusion of a contract for observance of said requirements.
A tender for the sale of an enterprise incorporating a cultural heritage item (monument of history and culture) of the peoples of the Russian Federation shall be conducted in the procedure established by the legislation of the Russian Federation on the privatisation of state and municipal property for the purpose of selling out cultural heritage items (monuments of history and culture) of the peoples of the Russian Federation by tender. A contract of the purchase/sale of such enterprise shall meet the requirements applicable to a contract of purchase/sale of a cultural heritage item (monument of history and culture) of the peoples of the Russian Federation established by the legislation of the Russian Federation on the privatisation of state and municipal property.
In case of sale of object of the agreement on public-private partnership or municipal-private partnership, the obligatory term of the tender shall be fulfillment by the buyer of obligations of the private partner not fulfilled by it by the moment of holding of the tender, on the basis of data on obligations under the agreement on public-private partnership or municipal-private partnership actually fulfilled by the private partner by such moment. Participants of the tender for sale of object of the agreement on public-private partnership or municipal-private partnership shall meet the requirements of the legislation of the Russian Federation on public-private partnership and municipal-private partnership and the tender documentation approved for holding of tenders for the right to conclude the agreement on public-private partnership or municipal-private partnership.


If objects of the agreement on public-private partnership or municipal-private partnership were not sold using the procedure set by this Article, such objects shall be transferred to the public partner that is a party to the agreement on public-private partnership or municipal-private partnership in accordance with this Article, on condition of reimbursement of expenses of the private partner and/or the sponsor incurred in accordance with the direct agreement, the amount of which is reduced by the amount of the loss inflicted to the public partner and third parties in relation to non-fulfillment of its obligations by the private partner.
The sale of the enterprise shall be carried out by auction, unless the buyer must comply with certain terms in respect of this enterprise.
The participant that has offered the highest price for the enterprise put up for sale shall be deemed to have won the auction (hereinafter referred to as "the winner in the auction").


The sale of the enterprise shall be done by tender if in respect of the enterprise the buyer must observe the terms established by a decision of a meeting of creditors or the creditors' committee in accordance with the legislation of the Russian Federation (hereinafter referred to as "the terms of the tender").
The participant that has offered the highest price of the enterprise put up for sale shall be deemed to have won the tender, provided the participant observes the terms of the tender (hereinafter referred to as "the winner in the tender").
Within thirty working days as from the date of inclusion of data on the results of an inventory check of the debtor's property to the Comprehensive Federal Register of Data on Bankruptcy the bankruptcy creditor or an authorised body are entitled, if the rate of claim of the bankruptcy creditor or the rate of claim of the authorised body exceeds two per cent of the total amount of the claims of bankruptcy creditors and authorised bodies included in the register of creditors' claims, to send to the receiver a demand to recruit an appraiser citing the property to be appraised.


Within two months as from the date of receiving such claim the receiver is bound to ensure the appraisal of the cited property on account of the debtor's property.
If the debtor's monetary assets are insufficient for conducting the property's appraisal on demand of the bankruptcy creditor or authorised body, the receiver shall notify thereof the person that has raised the corresponding claim within two working days as from the date when it is received. On such occasion, the property shall be appraised, if the bankruptcy creditor or authorised body that has raised the claim for the property's appraisal remit onto the debtor's account monetary assets to make payment for the appraiser's services in the amount of the cost of them. On the basis of the results of sale of the debtor's enterprise (property) the cited monetary assets are subject to repayment to the bankruptcy creditor or authorised body.


A report on the appraisal of the debtor's property is subject to inclusion by the receiver to the Comprehensive Federal Register of Data on Bankruptcy within two working days as from the date of receiving a copy of this report in electronic form.
A repeated appraisal of the property of the debtor in respect of which a claim has been earlier raised for making an appraisal in compliance with this item shall be made if the bankruptcy creditor or authorised body defray the cost of making such appraisal.
The initial selling price of the enterprise shall be fixed by a decision of a meeting of creditors or of the creditors' committee subject to the market price of the debtor's property determined in compliance with an appraiser's report, if such appraisal has been conducted on demand of the bankruptcy creditor or authorised body in compliance with Russian Bankruptcy Federal Law.


In a sale of an enterprise a closed form of bidding may be used to offer price for the enterprise (bids offering a price for the enterprise are submitted simultaneously with participation applications and they cannot be disclosed before bidding is started) or an open form of bidding to offer a price for the enterprise (bids offering a price for the enterprise are announced openly by participants in bidding).
The sale of the enterprise is conducted in an electronic form.


A receiver shall hand in to a meeting of creditors or to the creditors' committee for approval proposals for the sale of the debtor's enterprise, incorporating information on the enterprise, on its composition and its characteristics, on the time terms for its sale and on the form of the bidding (an auction or a competition), on the terms of the competition (if the sale of the enterprise is carried out in conformity with the legislation of the Russian Federation by way of holding a competition), on the form of handing in proposals for the price of the enterprise, on the starting price of its sale, in the mass media and on Internet sites where it is suggested to publish and place a communication on the sale of the enterprise, and on the time terms fixed for the publication and placement of said communication.
The offer to sell the debtor's enterprise shall be presented for endorsement to a meeting of creditors or to a creditors' committee after including a report on the appraisal of the debtor's property into the Unified Federal Register of Data on Bankruptcy, if such appraisal has been conducted at the request of the bankruptcy creditor or authorised body in compliance with Federal Law.


If at the time fixed by the external management plan or within two months as from the date of presenting by the receiver to a meeting of creditors or to a creditors' committee offers to sell the debtor's enterprise (if the external management plan does not fix the time for endorsement) a meeting of creditors or a creditors' committee does not endorse data on the enterprise, on the time for its sale, on the form of sales, on the terms of a tender (if the enterprise is to be sold by way of holding a tender in compliance with the legislation of the Russian Federation), on the form of bidding as regards the enterprise, on the initial selling price thereof, on the mass media and Internet sites where it is planned accordingly to publish and insert an announcement of the enterprise's sale, on the time of publishing and inserting the cited announcement, the external receiver is entitled to file with an arbitration court a petition for endorsement of the procedure for, time and terms of sale of the debtor's enterprise.

A ruling of an arbitration court on endorsement of the procedure for, time and terms of selling the debtor's enterprise may be appealed against.
Appealing against an appraisal report drawn up shall not serve as a ground for suspension of sales.
As the trade organiser shall come out a receiver or a specialised organisation invited for this purpose, the services of which shall be remunerated at the expense of funds of the debtor's enterprise. This organisation shall not be an interested person with respect to the debtor, the creditors or the receiver.


The organiser of the sale shall carry out the following functions:

publish and place an announcement of the fact that the enterprise is put up for sale and an announcement of the results of the sale;
accept participation applications and bids offering a price for the enterprise;
conclude earnest money contracts with applicants;
designate participants in the sale;
conduct the sale if the open form of bidding is used to offer a price for the enterprise;
designate the winner in the sale and sign minutes on the results of the sale;
notify the applicants and participants in the sale of the results of the sale.
The amount of earnest money for participation in the sale shall be set by the receiver, and it shall not exceed 25 per cent of the initial selling price for the enterprise.
The term for filing participation applications for the sale shall not be less than 25 business days after the publication and placement of the announcement of the sale.
No later than 30 days before the date of holding the bidding, its organiser is obliged to publish a communication on the sale of the enterprise, and in a printed edition at the place of the debtor's stay.


The announcement of the sale of the enterprise shall contain the following:

information on the enterprise, its composition and characteristics, a description of the enterprise and a procedure for getting acquainted with the enterprise;
information on the form of the sale and the form of bidding;
participant qualification requirements if the sale is a closed one;
the terms of tender if the sale is conducted in the form of tender;
the procedure for, the place of, the term for, and the time of, submission of participation applications and bids (the date and time of commencement and termination of submission of said applications and bids. In the event of holding the sale of an enterprise with the use of a public form of bidding, the end time of bidding shall not be fixed);
the procedure for completing formalities for participation in the sale, a list of the documents to be filed by participants and the requirements applicable to the form thereof;
the amount of earnest money, the term and procedure for depositing earnest money, the details of the accounts into which earnest money is to be paid;
the initial selling price of the enterprise;
bidding increment value for increasing the initial selling price of the enterprise ("auction step") if the public form of bidding is used to offer a price for the enterprise;
the procedure and criteria for selecting the winner in the sale;
the date, time and place of drawing up the results of the sale;
the procedure and term for conclusion of a contract of purchase/sale of the enterprise;
the term for payments and the details of the accounts into which payments are to be made;
information on the organiser of the sale, its postal address, email address and contact phone number.


During preparation for the sale of the enterprise the organiser of the sale shall accept participation applications and bids of participants in the sale offering a price for the enterprise and also conclude earnest money contracts.
A draft contract for the purchase and sale of an enterprise and an earnest money contract with the electronic signature of the sale organizer shall be inserted in the Unified State Register of Information on Bankruptcy, without its publication in an official edition.
A participation application for the sale shall meet the requirements which are established in accordance with the present Federal Law and mentioned in the announcement of the sale, and it shall be drawn up as an electronic document.
A participation application for the sale shall be drawn up in an arbitrary form in writing in the Russian language, and it shall contain the following details specified in the announcement of the sale:
the name, organisational legal form, location and postal address (for a legal entity) of the applicant;
the surname, first name and patronymic, passport details and residence details (for a natural person) of the applicant;
the contact phone number and e-mail address of the applicant.


A participation application for the sale shall also contain information on the applicant's having or not having an interest in respect of the debtor, the creditors and the receiver and on the nature of such interest, information on an interest of the receiver in the applicant's capital, and also information on the self-regulating organisation of qualified receivers in which the receiver is member or head.
If the closed form of bidding is used to offer a price for the enterprise, a participation application for the sale may contain a bid that is not subject to disclosure before the commencement of the sale.
Copies of the following documents shall attached to the participation application for the sale:
an excerpt from the comprehensive state register of legal entities (for a legal entity), an excerpt from the comprehensive state register of individual entrepreneurs (for an individual entrepreneur), identification documents (for a natural person), an appropriately-attested Russian translation of documents on the state registration of the legal entity or the state registration of the natural person as an individual entrepreneur under the legislation of the relevant state (for a foreign entity/person);
a document confirming the powers of a person to commit actions on behalf of the applicant.
In the event of a closed sale, a participation application for the sale shall be filed with the documents confirming that the applicant meets the qualifications established in respect of a participant in the sale in accordance with the legislation of the Russian Federation in respect of restricted-transaction property and mentioned in the announcement of the sale.


In the event of a tender, a participation application for the tender shall contain the applicant's undertaking to observe the terms of the tender.
A bid for the sale submitted to the organiser of the sale shall be registered in the book of participation applications for the sale including the serial number as well as the date and exact time of submission thereof.
An acknowledgement of registration of a participation application for the sale shall be also sent to the applicant in the form of an electronic document on the date of registration of the application to the applicant's e-mail address cited therein.
The documents attached to a participation application shall be filed in the form of electronic documents with the applicant's electronic signature.
The organiser of the sale shall ensure the non-disclosure status of information and the offers contained in the participation applications filed for the sale or the bids offering a price for the enterprise until the commencement of the sale or until the time when access is opened to the bids filed for the sale in the form of electronic documents.
An applicant is entitled to modify or withdraw its participation application for the sale at any time before the expiry of the term for filing participation applications for the sale.


A decision of the organiser of the sale on clearing applicants for participation in bidding shall be taken on the results of consideration of the participation applications submitted for the sale, and it shall be formalised by means of minutes designating participants in the sale.
The following shall be cleared for participating in the sale: the applicants that have submitted participation applications for the sale and the documents attached thereto which comply with the requirements established by the present Federal Law and mentioned in the announcement of the sale. The applicants cleared for taking part in the sale shall be deemed bidders.
A decision on refusal to clear an applicant for participation in bidding shall be taken if:
the participation application for the sale does not meet the requirements established in accordance with the present Federal Law and mentioned in the announcement of the sale;
the documents filed by the applicant do not comply with the requirements established for them or are not reliable;
no acknowledgement has been received as of the date of drawing up of the minutes whereby bidders are designated as concerning the receipt of earnest money into the accounts specified in the announcement of the stale.
The organiser of the sale shall notify all applicants of the results of consideration of the participation applications submitted for the sale and of the applicant's being deemed or not being deemed bidders, by means of sending copies in writing or in the form of an electronic document of the minutes whereby bidders are designated to the applicants within five days after the day on which the minutes are signed.
A decision on deeming or refusal to deem an applicant bidder is subject to appeal in the procedure established by the legislation of the Russian Federation.
If in the course of the sale the public form of bidding is used to offer a price for the enterprise the organiser of the sale shall conduct an auction during which bids are made by participants in the sale publicly in the course thereof.


The auction shall be conducted by means of increasing the initial selling price by the "auction step" set by the organiser of the sale at five to ten per cent of the initial price and is indicated in the announcement of the sale.
If before the third announcement of the last bid neither of the participants in the sale declares its/his/her intent to offer a higher price the auction shall be terminated, and the highest bidder in the auction shall be deemed the winner, the highest price being the one called out last by the organiser of the auction.
If in the course of the sale the closed form of bidding is being used to offer a price for the enterprise then bids offering a price for the enterprise shall be presented by participants in the sale simultaneously with their participation applications for the sale or on the day when the results of the sale are being drawn up before the sale deadline indicated in the announcement of the sale.
The bids presented by participants in the sale to offer a price for the enterprise shall be announced in public by the organiser of the sale on the date and at the time and place specified in the announcement of the sale.


The organiser of the sale shall examine the bids of the participants in the sale offering a price for the enterprise and select the winner in the sale. If two or more bids filed by participants in the sale offer the same price for the enterprise the winner in the sale shall be the one that has submitted its/his/her participation application for the sale before the other participants.
The organiser of the sale shall provide equal access for all persons to the sale, for instance, to information on the conduct of the sale, and ensure the persons' right to participant in the sale without their being charged with the payments for which there is no provision in the Russian Bankruptcy Federal Law.
For the purpose of conducting the sale the organiser of the sale shall use information systems which ensure:
unfettered and free-of-charge access to information on the conduct of the sale and on the rules for operation involving the use of such system;
the right to take part in the sale free-of-charge;
the possibility of submitting a participation application for the sale and the documents attached thereto as well as copies thereof in the form of electronic documents;
the storage and processing in electronic form of participation applications for the sale and the other documents submitted by applicants through the use of cryptographic data protection means certified in the procedure established by the legislation of the Russian Federation;
the protection of the information (participation applications and other documents) provided by applicants, for instance, the preservation of that information, the prevention of information deletion and its unauthorised modification and copying;
the creating, processing, storing and presenting of information and documents in electronic form, for instance, minutes of the commission on the results of the sale;
the uninterrupted operation of such systems and access thereto for users, for instance, applicants within the entire term of the sale.


 A decision of the organiser of the sale on selecting the winner in the sale shall be taken on the day when the results of the sale are being drawn up, and it shall be formalised by means of minutes on the results of the sale containing the following:
the name and location (for a legal entity) or the surname, first name, patronymic and residential address (for a natural person) of each participant in the sale;
the bids of each participant in the sale offering a price for the enterprise, if the closed form of bidding is used to offer a price for the enterprise;
the results of consideration of the bids submitted by participants in the sale to offer a price for the enterprise;
the name and location (for a legal entity) or the surname, first name, patronymic and residential address (for a natural person) of the participant in the sale who has offered the highest price for the enterprise as compared with the bids of other participants in the sale, except for the bid of the winner in the sale (if the closed form of bidding is used to offer a price for the enterprise) or the participant in the sale who did the last but one bid during the auction (if the public form of bidding is used to offer a price for the enterprise);
the name and location (for a legal entity) or the surname, first name, patronymic and residential address (for a natural person) of the winner in the sale;
a substantiation for the decision taken by the organiser of the sale to deem a participant in the sale the winner.
The organiser of the sale shall notify all the participants in the sale of the results of the sale by means of sending thereto the minutes on the results of the sale in the form of an electronic document at the latest on the working day following the date when such minutes are signed to the e-mail address cited in a participation application for the sale.

 The decision on deeming a participant in the sale the winner is subject to appeal in the procedure established by the legislation of the Russian Federation.
The earnest money amounts deposited by the applicants shall be refunded to all the applicants, except for the winner in the sale, within five business days after the day on which the minutes on the results of the sale were signed.


 Within 15 working days after the signing of the minutes on the results of the sale or after the date of the decision on deeming the sale unaccomplished the organiser of the sale shall promulgate an announcement of the results of the sale in an official edition and place on the internet website of that official edition, in masse media at the place where the debtor is located and in the other mass media used to publish the announcement of the sale. If the sale is deemed accomplished an indication shall be made in that information announcement of the winner in the sale, including information on the existence or lack of an interest of the winner in the sale in respect of the debtor, the creditors and the receiver and on the nature of that interest, information on an interest of the receiver in the capital of the winner in the sale, on the self-regulating organisation of qualified receivers in which the receiver is member or head, and also information on the price offered by the winner for the enterprise.
Within two business days after the signing of the minutes on the results of the sale the organiser of the sale shall send copies of the minutes to the winner in the sale and the receiver. Within five days after the signing of the minutes the receiver shall send an offer to the winner in the sale to conclude a contract of purchase/sale of the enterprise together with a draft contract in accordance with the price offered by the winner in the sale for the enterprise.


 If the winner in the sale refuses or evades to sign the contract within five days after the receipt of said offer of the receiver the earnest money amount deposited shall not be refunded thereto and the receiver shall be entitled to make a proposal for conclusion of the contract of purchase/sale of the enterprise to the participant in the sale that has offered the highest price for the enterprise as compared with the other participants in the sale, except for the winner in the sale.
If no participation applications have been submitted for the sale or only one participant has been cleared for bidding the organiser of the sale shall take a decision on deeming the sale unaccomplished.
If only one participant has been cleared for bidding, with its/his/her participation application for the sale meeting the terms of the sale (if the sale is carried out in the form of a tender) or contains a bid offering a price for the enterprise not below the initial selling price of the enterprise set then a contract of purchase/sale of the enterprise shall be concluded by the receiver with this bidder in accordance with the terms of the sale (if the sale is carried out in the form of a tender) or with the offer of a price for the enterprise it/he/she has offered.
If the sale is deemed unaccomplished and if no contract of purchase/sale is concluded with the sole bidder and also if no contract of purchase/sale of the enterprise is concluded according to the results of the sale the receiver shall do the following within two days after the expiry for taking decisions on deeming the sale unaccomplished, for concluding a contract of purchase/sale of the enterprise with the sole bidder, for concluding a contract of purchase/sale of the enterprise according to the results of the sale: taking a decision on conducting a repeated sale and on setting an initial selling price of the enterprise. The repeated sale shall be carried out in the procedure established by Federal Law. The initial selling price of the enterprise in the repeated sale shall be set at ten per cent lower than the initial selling price of the enterprise set in the initial sale.


 The sale of the enterprise shall be made formal by means of a contract of purchase/sale of the enterprise concluded by the receiver with the winner in the sale.
The terms and conditions sine qua non of the contract of purchase/sale of the enterprise are as follows:
information on the enterprise, its composition and characteristics and a description of the enterprise;
the selling price of the enterprise;
the procedure and term for transferring the enterprise to the buyer;
the terms according to which the enterprise is acquired and the buyer's undertaking to comply with these terms (if the enterprise is sold by tender);
information on the existence or lack of an encumbrance on the enterprise, including without limitation a public easement;
the other terms and conditions envisaged by the legislation of the Russian Federation.

When the enterprise is being sold payment according to the contract of purchase/sale of the enterprise shall be effected by the buyer within 30 days after the date of signing of the contract.
The delivery of the enterprise by the receiver and the acceptance thereof by the buyer shall be carried out through the use of certificate of acceptance signed by the parties and drawn up in accordance with the legislation of the Russian Federation.

If a repeated sale of the debtor's property is deemed unaccomplished or if no contract of purchase/sale is concluded with the sole participant therein and also if no contract of purchase/sale is concluded according to the results of the repeated sale then the debtor's property sold at the sale is subject to sale by means of a public offering.
When the debtor's property is being sold by means of a public offering the following shall be indicated in the announcement of the sale apart from the information envisaged by Russian Bankruptcy Federal Law: the amount of reduction in the initial selling price of the debtor's property and the term upon the expiry of which said initial price is gong to be successively reduced. As this is being done, the initial selling price of the debtor's property shall be set in the amount of the initial price specified in the announcement of the sale of the debtor's property at the repeated sale.
The organiser of the sale shall consider the participation application for the sale and take a decision on clearing an applicant for bidding.
If within the established term there no participation application is submitted for the sale as containing a bid offering a price for the debtor's property not below the established initial selling price of the debtor's property then the initial selling price of the debtor's property shall be reduced within the term indicated in the announcement of the sale of the debtor's property by means of a public offering.
The right to acquire the debtor's property shall be held by the participant in the sale of the debtor's property by means of a public offering which submitted a participation application for the sale within the established term containing a bid for the debtor's property not below the initial selling price of the debtor's property set for the specific period of the sale, in the absence of bids on the part of other participants in the sale of the debtor's property by means of a public offering.
If several participants in the sale of the debtor's property by means of a public offering submitted applications for participation in the sale of the debtor's property within the established term containing various bids for the debtor's property not below the initial selling price of the debtor's property fixed for a definite period of the sale, the right to acquire the debtor's property shall be held by the sale participant that has offered the maximum price for this property.
If several participants in the sale of the debtor's property by means of a public offering submitted applications within the established term containing equal bids for the debtor's property not below the initial selling price of the debtor's property fixed for a definite period of the sale, the right to acquire the debtor's property shall be held by the sale participant that was the first to file an application for participation in the sale of the debtor's property by means of a public offering within the established time period.
The acceptance of applications shall be stopped from the time when the winner in the sale of the debtor's property by means of a public offering is designated.
The debtor's property whose balance-sheet value as of the last accounting date before the date of commencement of the winding up is below 100 000 roubles shall be sold in the procedure established by a decision of a meeting of creditors or the creditors' committee.
It is not extend to cases when a debtor's property being a product manufactured by the debtor in the course of the debtor's economic activities is being sold.

Further information
If you would like further information on any aspect of the issues
described in this note please contact a person mentioned below

IMG_0051.JPG
Contact
Dmitry Zipunnikov
Partner, IBA member, INSOL Europe member
T + 7 902 3627056
d_zipunnikov@mail.ru

This note is written as a general guide only. It should not be
relied upon as a substitute for specific legal advice.

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