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ARTICLE · 07 APRIL 2021

Proposed Pre-Packaged Regulations Can Revolutionize Insolvency Proceedings

Dua Associates
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The IBC was enacted in 2016 to solve myriad issues related to reorganizations and bankruptcy procedures, including multiple and inconsistent laws, delays in providing resolution, and a lack of simplified processes.

IndiaInsolvency/Bankruptcy/Re-Structuring
Iqbal Tahir
Iqbal Tahir
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The Insolvency and Bankruptcy Code (IBC) was enacted in 2016 to solve myriad issues related to reorganizations and bankruptcy procedures, including multiple and inconsistent laws, delays in providing resolution, and a lack of simplified processes. Four years since its implementation, the IBC has made noticeable inroads in providing corporate insolvency resolution processes (CIRPs) to stressed companies: by the end of September 2020, a total of 4,008 CIRPs had been admitted, of which 473 were settled or on appeal/review, 277 were closed by resolution, and 1,025 were closed by liquidation.

Despite achieving a reasonable degree of progress, the IBC is functioning under an ecosystem which is still evolving, and which has already experienced its share of teething troubles. A formal, court-adjudicated regime makes the entire process considerably lengthy and expensive. Most CIRPs are not completed within the stipulated time of 180 days (or 330 days with extensions). The

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