Fast-Track Corporate Insolvency Resolution Process: A Comparative Study Of India And The USA

Jayprakash Mishra, LL.M., National Law University Odisha

ABSTRACT

Corporate insolvency forms one of the major issues the stagnant and stunted growth of the corporate sectors in India. It results in huge losses to the depositors and share-holders and affects the securities market. The insolvency and bankruptcy is dealt with under the aegis of the Insolvency and Bankruptcy Code of 2016. The Insolvency resolution process under it though faster than the preceding laws was found to be inadequate in terms of certain small scale companies, companies with small complexities of creditors and other financial creditors. This led to the formation of fast-track corporate insolvency process which sought to complete the insolvency process in a more protracted manner. Similar provisions for small companies also exist in American insolvency laws in the form of Small Businesses reorganisation Act. It also provides that when a small company files for insolvency, the regular process of insolvency must not be followed and the insolvency professionals must use the protracted method to save the company from losing out of business and revenues. But there are very basic and peculiar differences between the structure and application of the two laws.