Govt looking to implement pre-packaged bankruptcy plan, says report

The government is planning to implement a pre-packaged bankruptcy  scheme, prevalent in the US, Business Standard reported citing sources.

The move aims to strengthen the framework of insolvency procedures and cut the cost and time of implementing the resolution plans, officials in the Ministry of Corporate Affairs told the newspaper.

"The scheme will typically allow a stressed company to prepare a financial reorganisation plan with the approval of at least two-thirds of the creditors before filing an insolvency application by any party at the NCLT," one of the official was quoted as saying in the report.

The plan will be prepared by debtors and creditors of the firm, as per the report.