By Rituraj Baruah
New Delhi, Aug 5 (IANS) The committee looking at the prospects and the framework for pre-packaged restructuring deals under the Insolvency and Bankruptcy Code (IBC) is expected to come up with its report in a months time, said M.S. Sahoo, Chairman, Insolvency and Bankruptcy Board of India (IBBI).
Speaking to IANS, Sahoo said that prepackaged or pre-pack is an alternative mechanism which is under consideration and is being prepared.
He said that if the pre-pack framework comes into force, the resolution or the restructuring plan between the company and the lenders would be framed and prepared beforehand, which would have to be approved by the National Company Law Tribunals (NCLT).
Experts are of the view that the pre-packaged insolvency framework will help in easing the burden on the NCLT and the National Company Law Appellate Tribunal (NCLAT). Already there is a huge backlog of cases at the NCLT benches and most of the CIRP cases have been delayed.
On the special resolution framework for micro, small and medium enterprises (MSME) announced in May, Sahoo said that the framework is under works and is in advance stage. The announcement to come up with a special resolution framework for MSMEs under the IBC was made by Finance Minister Nirmala Sitharaman as the sector has been among the worst hit during the Covid-19 pandemic.
On the journey of IBC since its introduction in 2016, Sahoo said that it has been a “fantastic” one given the various constraints witnessed over the years.
“You have to see what outcome you are getting… particularly the debtors. Today they want to come and resolve the issue before reaching the NCLT… that is the biggest change that has happened,” the IBBI chief told IANS.
(Rituraj Baruah can be contacted at [email protected])