Bankruptcy assets at auction: how to buy and what to watch out for

When a Ukrainian court declares a company or a person bankrupt, their assets are sold to pay off the creditors. Under Ukraine’s Bankruptcy Procedure Code these sales take place at open electronic auctions on Prozorro.Sale. The organizer is the insolvency practitioner (liquidator), and anyone can buy.

What is sold

• Single property complexes — factories, farms, grain elevators together with buildings and equipment.
• Real estate — workshops, warehouses, offices, shops, as well as flats and houses of bankrupt individuals.
• Machinery and vehicles — trucks, special and agricultural machinery, cars.
• Equipment and stock — machine tools, production lines, materials.
• Property rights — receivables, shares in companies.

All such lots are collected in the “Bankruptcy” catalogue; you can filter them by region, price and words in the title — for example, “tractor” or “warehouse”.

Why the price drops

The starting price is set based on a valuation of the assets. If no buyer is found at the first auction, further auctions are held — each with a lower starting price. The procedure and the size of the discounts are stated in the announcement. That is why bankruptcy assets can often be bought well below market if you follow the asset: the lot page has a “Previous auctions of this asset” block, and the discount is marked with a red badge. More in our guide to repeat auctions.

What to watch out for

• Assets are sold as is. Machinery may have stood for years without maintenance, buildings without heating or security. Inspect the lot before applying: the insolvency practitioner’s contacts are in the announcement.
• Completeness. Check exactly what the lot includes: the asset description in the documents can be brief, and part of the equipment may be missing.
• Documents. For real estate — title and the land under the building; for machinery — registration documents.
• Receivables are a right to claim a debt, not money. Their value depends on whether the debt can actually be recovered from the debtor.
• Challenges. Auction results in a bankruptcy case can be challenged in court. This is rare, but for large purchases it is worth consulting a lawyer.

How to take part

1. Register on one of the accredited Prozorro.Sale e-marketplaces.
2. Pay the registration fee and the guarantee deposit — the amounts and bank details are in the announcement.
3. Apply before the application deadline — it is shown on the lot page.
4. On auction day, raise the price online; whoever offers the most wins.

After you win

The winner signs the auction protocol and a sale and purchase contract with the insolvency practitioner, pays for the assets within the deadline in the announcement and receives them under a transfer certificate. A contract for real estate is certified by a notary. Bidders who did not win get their guarantee deposit back under the auction rules.

Bankruptcy assets currently accepting applications

Looking for particular machinery or premises? Save a filter with a region and keywords — the radar will message you in Telegram as soon as such a lot appears, including at a repeat auction with a lower price.

This is an overview for orientation, not legal advice. The binding terms of each auction are in its announcement and documents on prozorro.sale.