Prepack insolvency resolution: Swiss Challenge options, IBC tweaks on cards

The prepack is to start with a base resolution plan (BRP), which will face a Swiss Challenge; and this should come from the promoters if they are eligible and interested

The M S Sahoo committee has suggested two options on prepacks — with and without a ‘Swiss Challenge’ — and a quick amendment to the Insolvency and Bankruptcy Code (IBC), preferably by an Ordinance. It is, however, categorical that there shall be no dilution of the provisions of Section 29A of the IBC.

In cases with a Swiss Challenge, the rights of operational creditors (OCs) and dissenting financial creditors (FCs) are to be protected subject to the minimum comfort provided under Section 30(2)(b) of the IBC; and in instances without it, there is to be no impairment to OCs. The prepack