Pre-Packaged Insolvency Resolution Process for MSMEs

Overview

The Pre-Packaged Insolvency Resolution Process, introduced through the Insolvency and Bankruptcy (Amendment) Act 2021 and operationalised under the IBBI (Pre-Packaged Insolvency Resolution Process) Regulations 2021, represents a structurally distinct resolution pathway available exclusively to corporate debtors classified as Micro, Small, or Medium Enterprises under the MSMED Act 2006. PPIRP is designed to address the specific vulnerabilities of MSMEs in traditional CIRP — the displacement of management, the reputational harm of public insolvency proceedings, and the disproportionate administrative cost relative to enterprise value. Under PPIRP, the corporate debtor's existing promoters and management remain in control throughout the process, while a resolution professional oversees compliance and creditor engagement. The statutory timeline of 120 days, significantly shorter than CIRP's 330-day outer limit, reduces uncertainty and preserves going-concern value. The PPIRP mechanism requires the corporate debtor to secure the approval of unrelated financial creditors representing at least 66 per cent in value before filing an application with the NCLT. A base resolution plan — the plan submitted by the corporate debtor itself — must be prepared before initiation and forms the floor against which competing resolution plans are benchmarked. Where the base plan does not maximise creditor recoveries, the resolution professional is obligated to invite competing plans through a Swiss Challenge process. Corpus Juris Legal advises promoters and management teams of MSMEs in Delhi NCR on PPIRP eligibility, the preparation and negotiation of the base resolution plan, pre-filing creditor consent strategies, and the management of proceedings once the NCLT admits the application. We also advise financial creditors on their rights within PPIRP — including the evaluation of the base plan, participation in the Swiss Challenge, and the exercise of voting rights on the final resolution plan. Our counsel are conversant with the NCLT Delhi bench's approach to PPIRP admissions and have experience navigating the procedural intersections between PPIRP and the IBBI Regulations governing resolution professionals' conduct.

Key Service Components

• ◆PPIRP eligibility assessment — MSMED Act classification, default quantum, and IBC Section 54A requirements
• ◆Base resolution plan preparation — financial modelling, creditor treatment structuring, and legal compliance
• ◆Pre-filing creditor consent strategy — unrelated financial creditor 66% approval mechanics
• ◆NCLT application drafting and filing — Section 54C petition and supporting affidavits
• ◆Resolution professional coordination — compliance monitoring and creditor meeting management
• ◆Swiss Challenge process advisory — competing plan evaluation and voting strategy
• ◆Committee of Creditors advisory within PPIRP — rights, obligations, and voting thresholds
• ◆Statutory timeline management — 90-day and 120-day milestones under IBBI PPIRP Regulations 2021
• ◆Transition from PPIRP to CIRP — procedural requirements and creditor implications
• ◆NCLT Delhi representation — hearings, compliance reports, and plan approval proceedings

Our Approach

Corpus Juris Legal approaches PPIRP mandates with the same commercial intelligence applied to M&A transactions — because PPIRP is, in essence, a pre-negotiated restructuring with a judicial seal. Our team works alongside the corporate debtor's finance leadership to build a base plan that is both legally compliant and creditor-acceptable, minimising the risk of a Swiss Challenge derailing promoter continuity. Every PPIRP matter is led by a partner with direct NCLT Delhi experience.

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