Out-of-court, debtor-in-control process to hasten resolution of insolvency cases

The proposal for a creditor-initiated insolvency resolution process under the Insolvency & Bankruptcy Code (Amendment) Bill, 2025, aims to reduce delays in insolvency cases by allowing lenders to initiate resolution without needing approval from the National Company Law Tribunal (NCLT) unless objected by the corporate debtor. This move has been welcomed by experts as a step towards faster resolution. According to Soumitra Majumdar, partner at JSA Advocates & Solicitors, narrowing the scope of adjudication will significantly reduce timelines, addressing admission delays and value erosion. The process is expected to be completed within 150 days, extendable by 45 days with the committee of creditors’ approval. This amendment is similar to pre-pack concepts in the UK and US, enhancing creditor rights to resolve debt quickly and boost the credit cycle. Read Article