Pre-Packaged Insolvency Resolution Process for MSME

Abstract

President of India has promulgated an Ordinance on 4th April 2021 to facilitate Pre-Packaged Insolvency Resolution Process (PPIRP) for the Corporate Debtors being MSME. PPIRP will provide an opportunity to financially stressed MSMEs to restructure their debts in time bound manner. Maximum overall period allowed for PPIRP is 120 days with a timeline of 90 days for submission of Resolution Plan to Adjudicating Authority by Resolution Professional after approval of Committee of Creditors. Prepack is quicker, more flexible, cost effective, time effective, Resolution Process for MSME and is less disruptive to businesses. PPIRP provides adequate protections and checks so that the system is not misused by the Corporates to avoid making payments to creditors.