The ministry of corporate affairs (MCA) has proposed sweeping changes to the Insolvency and Bankruptcy Code to bring more technology, transparency, and speediness to the corporate insolvency resolution process.

The draft proposal gives more power to adjudicating authority, allows mandatory admission of insolvency applications filed by financial creditors (FCs), seeks specialised framework for real estate providing major relief to allottees, and looks at expanding the scope of pre-packaged insolvency scheme beyond MSMEs.

The government has also suggested the Code may be amended to segregate the concept of the resolution plan from the manner of distribution of proceeds received from the successful resolution applicant.

In a bid to make the process fairer, a new mechanism for an equitable scheme of distribution of proceeds is proposed through which creditors will receive proceeds up to the liquidation value of the company based on the