Fraudulent management in pre-packaged insolvency can attract civil penalties and enforcement of charges on debtor assets.

Adjudicating authority may, to give effect to an order under section 66, create and enforce a charge on debts, obligations, mortgages or interests in assets in favour of a person or specified assignee, and may direct that a creditor's claim rank after other debts under the order of priority. Separately, during a pre-packaged insolvency resolution process, the authority may impose a civil penalty on officers who manage the corporate debtor with intent to defraud creditors or for any fraudulent purpose, on application by the resolution professional.

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