An Article 111 sale of part of a debtor’s assets is an external-administration measure authorised by the approved plan and must not make the debtor’s business operations impossible. It differs from a going-concern sale and from liquidation-estate realisation. Inventory, the required valuation and a functional review of the remaining business come first.
Recovery is the purpose
The sale raises funds under the external-administration plan rather than terminating the debtor’s activity.
Define the asset perimeter
Inventory separates saleable assets from those required for ongoing operations.
The business must remain viable
Article 111 bars a structure that makes the debtor’s economic activity impossible.
Quick self-check
- Open the approved external-administration plan.
- Verify inventory and asset identifiers.
- Determine whether an independent valuation was required.
- Assess production, licence and infrastructure dependencies.
- Compare bidding form, disclosure, deposit, contract and payment.
When Article 111 Applies
The external administrator may begin a partial asset sale only where the external-administration plan permits it, after inventory and after valuation where requested by a creditor or authorised authority under the statute.
The plan should explain which assets are sold, the expected proceeds and why the remaining assets support continued operations and recovery.
The Business-Continuity Limit
The sale must not make the debtor’s economic activity impossible. Review the asset’s functional role in production, safety, permits, infrastructure, contracts and operational links, not only its accounting classification.
How the Sale Proceeds
Article 111 refers to Article 110(4)–(19), subject to its own features. Statutory asset categories require electronic bidding, while restricted-transfer assets limit participation under the special law.
The notice discloses the asset, inspection, bidding form, application, deposit, opening price and deadlines. The published rules determine the winner, followed by contract, payment and transfer.
Exceptions and Legislative Date
Article 111 does not govern the ordinary sale of products manufactured in the debtor’s ongoing operations. It also prohibits a partial sale involving the special production facility referred to in Article 56.1 of the Environmental Protection Law.
The wording concerning property rights changes on 1 September 2026. A notice published after that date must use the version then in force rather than an earlier checklist.
Distinguish Adjacent Procedures
Article 110 sells the business as a going concern. Article 139 liquidates estate assets for creditor distributions. Article 111 operates within external administration and preserves an operating enterprise.
- approved external-administration plan;
- inventory and valuation records;
- business-continuity analysis;
- sale rules and notice;
- applications, minutes and contract;
- payment and transfer deed.
| Mechanism | Purpose | Effect on business |
|---|---|---|
| Partial asset sale, Article 111 | Recovery during external administration | Continues without the sold assets |
| Going-concern sale, Article 110 | Transfer of an enterprise complex | Complex passes to buyer |
| Estate sale, Article 139 | Creditor distributions | Occurs in liquidation proceedings |
| Ordinary product sales | Current operations | Not an Article 111 recovery measure |
| Removal of a critical asset | Prohibited structure | Makes business operations impossible |
Frequently Asked Questions
Can assets be sold without the external-administration plan?
Not under Article 111. A partial sale as a recovery measure must be authorised by the approved plan.
May any surplus-looking asset be removed?
No. Its legal status, operational function and effect on continued activity must be assessed.
Is valuation mandatory?
Inventory is required; valuation is used where requested through the statutory process.
Does a sub-RUB 100,000 value remove all requirements?
No. The current article uses the plan’s method for such property, while statutory prohibitions and the recovery purpose remain.
Is this a sale without auction in liquidation?
No. Article 111 concerns external administration and business recovery; simplified liquidation sales have a different legal basis.
Legal Sources
- Article 110 of Federal Law No. 127-FZ.
- Article 111 of Federal Law No. 127-FZ.
- Article 139 of Federal Law No. 127-FZ.
Related guides: going-concern sale, asset substitution and sale rules.
Need to Test a Partial Asset Sale?
An initial consultation can compare the plan, the asset’s operational role and the mandatory sale process.
BOOK AN INITIAL CONSULTATIONGeneral information as at 28 August 2026. Auctions after 1 September 2026 must apply the amended wording of Article 111.