The Insolvency and Bankruptcy Code (Amendment) Act, 2021: An Analysis

Abstract

In 2016, India got its own code pertaining to the laws governing insolvency and bankruptcy. The code provides a comprehensive set of rules and regulations in this regard. Later on, in 2020 and 2021, the code was further amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2021. This Amendment Act has introduced several new concepts, like pre-packaged insolvency resolution processes for micro, small, and medium enterprises, etc. Pre-packaged is not a completely new concept and there are currently countries that follow this regime already. Unlike the corporate insolvency process, the pre-packaged insolvency process allows for an informal understanding between creditors and debtors. This paper is an attempt by the researchers to analyze the Act in a wholesome manner. An attempt to draw a comparative analysis of the status of this regime in the United States will also be made where the mechanism is already in place and well established. Prepack has been introduced in different variants for separate jurisdictions, and each of them has specific features, which are peculiar to them. The authors will try to analyze the Act and its effects and implications on the insolvency regime in India. Further, suggestions and recommendations for the shortcomings of the Act will also be provided.