An ordinance has recently been promulgated for allowing the use of pre-packs as an insolvency resolution mechanism for Micro, Small and Medium Enterprises (MSMEs).
The defaults threshold is up to Rs 1 crore, under the Insolvency and Bankruptcy Code. This system of insolvency proceedings is becoming an increasingly popular mechanism for insolvency resolution in the UK and Europe over the past decade. Watch now LawWiser video where we discuss the Pre-packs Insolvency and its implications with Bomi Daruwala, Managing partner, Vaish Associates and Parvesh Khetrapal, Head legal and CS, Feedback Infra Group.
They discuss the idea behind the process, its benefits, how it protects the creditors from the misuse and what will be the impact of the second wave of pandemic on this new resolution process.
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