Prepacks Under the IBC: A Tussle Between Speed and Fair Process

Aparna Ravi ()
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Aparna Ravi: Samvad Partners

A chapter in Insolvency and Bankruptcy Reforms in India, 2022, pp 121-135 from Springer

Abstract: Abstract The insolvency resolution process, as envisaged by the Bankruptcy Law Reforms Committee was purely market driven with minimal regulatory or judicial involvement. Due to various amendments over time, there has been an attempt to control this process. However, one element that the law has remained silent on is the practice of prepacks. Prepacks are essentially an out-of-court settlement between the creditors, that gain the legal sanctity attached to a resolved insolvency proceeding. This way, prepacks get best of both worlds: a settlement between creditors with the coercive force of law. In this article, I review the current legislative and regulatory scheme in India, and present hindrances to the smooth operation for prepacks. Drawing from the learnings of the UK and USA, which make clear legislative provisions for operation of prepacks, I further analyse if legislative interference is required for the growing the practice of prepacks in India, and to what extent.

Date: 2022
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DOI: 10.1007/978-981-16-0854-4_6

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