Pre-Pack Insolvency Resolution Process For The MSMEs

I. INTRODUCTION

The advent of the Insolvency and Bankruptcy Code, 2016 ("IBC") has led to a transformative turnaround in the corporate distress resolution framework of India. It has given a new lease of life to a Company whose fate was earlier dependent upon a plethora of debt restructuring schemes introduced in the past, the failures of which often resulted in the Company being relegated to winding up proceedings or being stuck with a situation of sitting over unproductive assets whose value depreciated with time.

In the Indian context, most of the organizations are largely promoter driven and presently IBC under Section 29A bars the Company management and its related parties, responsible for pushing the Company into insolvency, to regain control over the business of such companies. This results in creating a situation of imbalance which can be best addressed through Pre-Pack schemes.