• Notification Date: 19-01-2023
• Notification No: N/A

MCA proposes IBC tweaks to Fast track Resolution Process

The government on Wednesday proposed a list of changes to the Insolvency and Bankruptcy Code (IBC). The changes include fast-tracking the resolution process and expanding the scope of the pre-packaged framework. 
 
A discussion paper presented by the Ministry of Corporate Affairs proposes the introduction of Fast Track Corporate Insolvency (FIRP) through which the corporate debtors of a company can choose to opt for resolution outside the judicial process. 
 
The proposed changes seek to allow unrelated financial creditors of a corporate debtor to select and approve a resolution plan through an informal out-of-court process and involve the Adjudicating Authority only for its final approval or a moratorium, if needed. The FIRP is being proposed to mitigate the issue of pendency of IBC cases, which has dragged resolution timelines. The option will be available only in cases below a certain asset value threshold notified by the government.