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IBC amendment seeks to provide prepack resolutions for MSMEs

NEW DELHI: The government has amended the Insolvency & Bankruptcy Code to provide for prepackaged resolution framework for micro, small and medium enterprises (MSMEs) through promulgation of an ordinance.

The alternative insolvency resolution framework is expected to bring about a quicker and more cost-effective process for MSMEs that would maximise value while being least disruptive to business, according to the ordinance, issued late Sunday.

Prepackaged insolvency resolution is seen advantageous as a resolution plan can be settled upon outside of court, leading to fewer business disruption costs, lower legal and procedural costs and less time in court.

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