Is External Reconstruction superior to Internal Reconstruction ?

In 'Internal Reconstruction', the assets are re-valued, liabilities are negotiated, and losses suffered are written-off by reducing the paid-up value of shares and/ or varying the rights attached to different classes of shares. Internal Reconstruction (IR) is considered to be superior to External Reconstruction (ER) since the exercises undertaken in IR requires an in-depth analysis and remedies instead of giving up in ER in the form of merger or acquisition and losing identity. In many a case, Internal Reconstruction does not require approvals from Courts or tribunals that may require conducting meetings of classes of shareholders and creditors, except in a case of reduction of paid up capital. Therefore, Internal Reconstruction is generally considered superior to External Reconstruction as it allows the company to revive itself without losing its identity or undergoing a complete dissolution and re-formation.