{"id":23867,"date":"2024-05-26T09:37:24","date_gmt":"2024-05-26T04:07:24","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=23867"},"modified":"2025-04-07T05:29:53","modified_gmt":"2025-04-06T23:59:53","slug":"pre-packaged-insolvency-resolution-process","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/pre-packaged-insolvency-resolution-process\/","title":{"rendered":"Pre-packaged Insolvency Resolution Process"},"content":{"rendered":"<h2><strong>About Pre-packaged Insolvency Resolution Process<\/strong><\/h2>\n<ul>\n<li>It was <strong>introduced in April 2021<\/strong> in the wake of Covid pandemic, to deal with stress of small and mid-sized companies.<\/li>\n<li>The idea was that resolution of distressed MSMEs requires different treatment due to the unique nature of their businesses.<\/li>\n<li>Pre-packaged insolvency process <strong>is an alternate and speedier resolution mechanism<\/strong> for micro, medium and small enterprises in financial distress.<\/li>\n<li><strong>Process<\/strong>\n<ul>\n<li>It involves the <strong>debtor and its creditors<\/strong> negotiating and agreeing on a resolution plan before initiating the formal insolvency process.<\/li>\n<li>Once approved by the creditors, the pre-packaged resolution plan is submitted to the <strong>National Company Law Tribunal<\/strong> (NCLT) for approval. It is similar to an out-of-court settlement process.<\/li>\n<li>The debtor and creditor work on a draft resolution plan before formally initiating the insolvency process.<\/li>\n<li>Once finalised and approved by the required majority of creditors, the plan is submitted to NCLT.<\/li>\n<\/ul>\n<\/li>\n<li>The pre-packaged insolvency process is <strong>initiated voluntarily by the debtor.<\/strong><\/li>\n<li><strong>Significance:<\/strong> Since the resolution plan is negotiated and finalised before filing with NCLT, it reduces the time taken for resolution compared to the corporate insolvency resolution process, with minimal disruptions.<\/li>\n<\/ul>\n<hr \/>\n<h3>Q1: What is the National Company Law Tribunal?<\/h3>\n<p>\u00a0It is a quasi-judicial authority incorporated for dealing with corporate disputes that are of civil nature arising under the Companies Act,2013.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/economictimes.indiatimes.com\/news\/india\/pre-pack-insolvency-a-success-for-five-companies\/articleshow\/110373627.cms?from=mdr\" target=\"_blank\" rel=\"nofollow noopener\"><u>Pre-pack insolvency a success for five companies<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Pre-packaged Insolvency Resolution Process was introduced in April 2021 in the wake of Covid pandemic, to deal with stress of small and mid-sized companies.<\/p>\n","protected":false},"author":5,"featured_media":23868,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-23867","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/23867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=23867"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/23867\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/23868"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=23867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=23867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=23867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}