The Insolvency and Bankruptcy Boards proposal to allow companies to withdraw from the process of voluntary liquidation is pragmatic. It will facilitate revival. This also makes the case for a pre-packaged insolvency resolution all the more compelling. Pre-packs entail a debtor-initiated reorganisation plan beforehand with creditors on board instead of a financial bidding process for resolution of the company admitted in the insolvency court. This will help speed up resolution and ease the burden on the National Company Law Tribunals.
In the US, the pre-pack plan takes effect once the company enters Chapter 11 that allows for a voluntary appeal by the debtor to be given a chance for a turnaround that the bankruptcy court can grant, if f…
Read the full article at: https://economictimes.indiatimes.com/blogs/et-editorials/pre-packaged-viable-route-to-insolvency/
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