What Is Pre-Pack Insolvency Or Bankruptcy?

The Insolvency and Bankruptcy Code, 2016, has boosted the industry in terms of either reviving the company in question or faster liquidation of the same without letting them deteriorate. Essentially it has brought down the timeline for recovery/ resolution from decades to a few years at the most. However, at the same time, the process under the IBC requires both time and money to fructify considering the direct and indirect costs involved. Litigation would be an initial cost in terms of engaging lawyers, accountants, RPs and their teams; indirect costs would include loss of business of the corporate debtor and loss of business because a company is undergoing CIRP, loss of goodwill, etc.