Which one of the following statements best describes the term lsquo Pre Pack Insolvency Resolution r...........

Economic and Social Issues industrial and labour policy

Which one of the following statements best describes the term ‘Pre-Pack Insolvency Resolution’?

It allows creditors and debtors to work on an informal plan and then submit it for approval.

It sets a minimum amount that a company has to pay in case of insolvency.

It provides for the control of experts on the company’s management after start of insolvency process.

It is a resolution plan solely prepared by creditors to defaulting company’s management before starting an insolvency process.

IBC Amendment Ordinance 2021 amends the Insolvency and Bankruptcy Code, 2016.

The Amendment allows the use of Pre-Packaged insolvency resolution as an alternative resolution mechanism for MSMEs. The threshold limit to trigger the Pre-Packaged insolvency resolution is between Rs 10 lakh to 1 Crore.
A pre-pack resolution is a form of restructuring that allows creditors and debtors to work on an informal plan and then submit it for approval.
Under this system, financial creditors will agree to the terms of a potential investor. Further, they will seek approval of the resolution plan from the National Company Law Tribunal (NCLT).

Hence option 1st is correct.