To augment the Insolvency and Bankruptcy Code, the Indian Government introduced the pre-packaged insolvency process exclusively for small and medium firms. This paper aims to critically review some of the key features of the process and also identifies potential glitches imminent in the initial years of implementation.
This study is descriptive and based on secondary data. The provisions of the pre-pack scheme, Insolvency and Bankruptcy Code and reports on the progress of insolvency resolution in India are used to substantiate the observations.
This study shows that pre-packs would certainly help enhance the small and medium enterprise insolvency resolution process in India. However, the ambitious time frame can be adhered to only if the institutional framework for bankruptcy is strengthened.
This paper is based on the initial regulatory provisions of the pre-pack process. Subsequent changes in regulations may affect the findings.
Some of the concerns in the process and the changes required to facilitate a smooth, speedy and efficient resolution process have been highlighted in this study.
Pre-packs are a very recent introduction to the insolvency regime in India. This paper makes a fervent attempt to explain the pre-pack process and the outcomes that can be expected in the early years after its rollout.
