Prepack Insolvency

The latest amendments in IBC, 2016 allows the use of “pre-packs” to resolve insolvency proceedings involving micro, small and medium-scale enterprises. According to the amendments, the government has notified a threshold for default – not exceeding ₹1 crore — at which point a pre-packaged resolution process may be initiated. Pre-packs, which are popular in many developed countries, are seen as a smoother way to resolve bankruptcies unlike the conventional insolvency resolution process. Pre-Packaged scheme being the latest step in the evolution of the IBC aims at blending various corporate restructuring tools such as sale of assets of the debtor to another company, refinancing and interim financing, change in management amongst other things before the debtor goes into insolvency proceedings under IBC. We at SIPL endeavour to provide framework for the best interest of the company and its stakeholders under prepack insolvency. We aim to achieve steady and smoother resolution of the distressed organization by navigating the intricate legal challenges and discovering the best possible opportunities.