Article 114 of Federal Law No. 127-FZ provides a special external-administration measure only for a debtor organised as a joint-stock company. It uses an additional issue of ordinary shares and cannot be launched by the external administrator alone: a corporate motion, plan approval and securities-law steps must align.
Joint-stock companies only
Article 114 does not create the same membership-interest mechanism for an LLC.
Recovery purpose
New cash must support solvency under the external-administration plan.
Cash only
Property contributions and set-off do not replace cash payment for the issue.
Quick self-check
- Confirm that the debtor is a joint-stock company.
- Locate the competent corporate decision and motion.
- Verify the creditor meeting and current plan.
- Check private placement, timing and pre-emption.
- Verify state registration of the placement report.
Who Initiates the Measure
The measure enters the plan only on a motion by the debtor’s management body that adopted the Article 94(2) decisions. After receiving it, the external administrator convenes a creditor meeting to consider adding the issue to the plan.
What the Plan Must Explain
The plan connects the issue to recovery: amount, timing, costs and distribution impact. Creditors assess feasibility but do not replace the company body or securities regulator.
How Shares Are Placed
Additional ordinary shares may be placed only through a private placement. Placement may last no more than three months. Payment is cash only, while existing shareholders retain their statutory pre-emptive right.
Calendar and File
The pre-emption period may not exceed 45 days from placement start. The placement-results report must be registered at least one month before external administration ends.
- corporate decision and motion;
- creditor-meeting minutes;
- amended external-administration plan;
- issue decision and disclosure;
- payment evidence and results report.
If the Issue Fails
If the issue is declared failed or invalid, purchaser funds are returned outside the statutory creditor priority. A sound plan therefore models both expected financing and issue-failure risk.
| Stage | Key record | Control point |
|---|---|---|
| Initiative | Corporate motion | Authority and valid resolution |
| Bankruptcy approval | Creditor decision and plan | Connection to solvency recovery |
| Placement | Issue decision | Private placement; maximum 3 months |
| Pre-emption | Shareholder notices | Maximum 45 days |
| Completion | Placement-results report | Registration at least one month before stage end |
Frequently Asked Questions
Can Article 114 be used for an LLC?
No. It addresses a debtor joint-stock company and additional ordinary shares.
May the external administrator launch it alone?
No. A motion by the competent debtor body and creditor consideration are required.
Can shares be paid for with property?
No. This special mechanism permits cash payment only.
May the placement be public?
No. Article 114 requires private placement.
What if the issue is invalid?
Purchaser funds are returned outside the creditor-distribution priority.
Legal Sources
Related guides: external administration, the external-administration plan and asset substitution.
Need to Test a Recovery Measure?
We can compare corporate approvals, the plan, the securities calendar and court records.
BOOK AN INITIAL CONSULTATIONGeneral information as at 28 August 2026. Securities treatment depends on the company form, records and procedural stage.