An Analysis of Companies Adopting Route for Resolution Through Ppirp (Pre-Package Insolvency Resolution Plan

Abstract

During Covid-19 pandemic and lock down, approximately 9% of the MSMEs i.e.,520 MSMEs had to shut down their businesses. This was brought into lime light by the survey conducted by National Small Industries Corporation Ltd. This led to a need to have some mechanism for MSMEs which ultimately brought PPIRP (Pre-packaged Insolvency Resolution Process) into existence in April, 2021 by way of amendment in the Insolvency and Bankruptcy Code, 2016, to revive these enterprises in a quicker and cost effective way. Pre-packs help the resolution process of such debt distressed companies through an agreement between present owners and creditors. Since the introduction of PPIRP, India witnessed only eight cases that initiated for Pre-pack insolvency out of which only six cases were admitted which needs to be analysed.