Draft pre-packaged scheme for insolvency largely based on British law

Rules to ensure that process doesn't remain debtor-driven but protects creditor's interests

The draft pre-packaged scheme being finalised by the corporate affairs ministry has drawn largely on the UK’s system, a senior government official said. This also puts in place checks and balances to ensure that the promoter and related parties do not get the control of a company, keeping with Section 29A of the Insolvency and Bankruptcy Code (IBC).
 
The purpose of this scheme is not just to have a timely and faster resolution mechanism but also to give legal sanction to a plan agreed between banks, promoters, and the buyer. The draft scheme has already been finalised by the