Pre-Packaged (Pre-Pack) Insolvency Resolution under IBC - Overview
Stressed Assets Resolution
11-11-2021
What is Pre-Pack?
Simply put, a Pre-Pack is an informal out-of-court settlement/restructuring between a creditor and a debtor, with the advantage of a formal court-based approval/enforcement system backing such restructuring.Pre-Pack has been in existence in developed countries like the US and the UK for many years and has enjoyed a fair bit of success. It has recently been introduced in India in a phased manner.
Why Pre-Pack?
•Amicable
– Facilitates resolution - It is
an amicable process, unlike CIRP which is perceived to be adversarial. It will
increase cooperation from management, reduce litigation and will allow for over
all ease of coordination.
•Value Preservation - Lesser disruption to business, no suspension of board, no transitioning of management, inspiring confidence of business partners
•Confidentiality – Confidence - Until a rescue plan is in place, the proceedings are not public knowledge, quelling panic.
Please download the document to know more
•Reduced
Litigation - Reduce
litigation time, as pre-pack spends very little time court and only goes, to
get the seal of approval.
•Value Preservation - Lesser disruption to business, no suspension of board, no transitioning of management, inspiring confidence of business partners
•Confidentiality – Confidence - Until a rescue plan is in place, the proceedings are not public knowledge, quelling panic.
Please download the document to know more
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