In this article, co-authored by Naman Singh Bagga, Partner C&S Partners, the authors analyse the Government of India’s proposal to introduce a pre‑packaged insolvency framework as part of its broader effort to strengthen the country’s bankruptcy regime. Drawing on global practices, particularly from the US and UK, the piece explains how pre‑packs offer a hybrid model that combines out‑of‑court negotiations with swift in‑court approval, thereby reducing value erosion, preserving business continuity, and enabling faster resolution for distressed companies.
The article highlights the potential advantages of pre‑packs for India, including reduced litigation, lower costs, and greater flexibility for stakeholders, while also acknowledging concerns around transparency, creditor protection, and the risk of promoter misuse. By situating the proposal within the evolving landscape of the Insolvency and Bankruptcy Code (IBC), the article underscores the need for carefully designed safeguards to ensure that pre‑packs enhance efficiency without compromising fairness. Ultimately, the piece positions pre‑packaged bankruptcy as a promising but nuanced reform that could significantly improve India’s insolvency ecosystem if implemented with robust checks and clear procedural guidance.
The Article was published by Mondaq and the link to original article can be found here.