The Centre has taken the Ordinance route to introduce pre-packaged insolvency resolution process (pre-pack) for companies classified as micro, small and medium enterprises (MSMEs).
India has 6-7 lakh companies that are classified as MSMEs, which could potentially benefit from the newly-introduced pre-packaged insolvency framework.
A pre-packaged insolvency in the Indian framework context is an arrangement where the resolution of a companys business is negotiated with a buyer before the appointment of an insolvency professional. It is a blend of informal and formal mechanisms, with the informal process stretching up to NCLT admission, followed by an existing NCLT supervised process for resolution, as specified under the Insolvency and …
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