A huge backlog of cases at National Company Law Tribunal (NCLT)
benches have stretched resources and led to delays in resolution of
cases. The current Covid-19 crisis has only added to the delays. A
pre-pack resolution will help shorten the long-winded court
process.
PRE-PACKAGED ADMINISTRATION
Pre-packaged insolvency resolution, or pre-packs, combines the
above approaches to corporate rescue, by providing statutory
recognition and protection to workouts that are agreed between
parties.
The important aspect is that it is debtor focused and not
creditor focused. The pre-pack procedure aims at saving the
business, its value, IP value and ensuring business continuity and
at the same time works towards bringing the company out of the
financial distress it is facing.
