The Pre-packaged Insolvency Resolution Process (PPIRP) has recently led to the full settlement of operational creditors’ claims in five cases.
About PPIRP:
- PPIRP offers an alternate resolution for MSMEs (micro, medium, and small enterprises) in financial distress.
- Introduced in 2021 by amending the Insolvency and Bankruptcy Code (IBC) 2016, it applies to defaults ranging from Rs 10 lakh to Rs 1 crore.
- A pre-packaged resolution plan, agreed upon by the debtor and creditors, must receive approval from the National Company Law Tribunal (NCLT).
- The process is hybrid, with a mainly informal pre-initiation phase and a formal post-initiation stage.
- The resolution must be completed within 120 days from the date of initiation.
Ref: Source
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