The question whether a counter claim filed against a Corporate Debtor is liable to be stayed during moratorium has been considered by the Courts/NCLT/NCLAT time and again. Since its inception, the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) has been a hotbed of discussions and debates amongst the legal experts. Under the Code, the concept of moratorium is envisaged under Section 13 and 14 and provides for a time period within which the following against the Corporate Debtor are prohibited:
Debt exchanges have long been utilized by distressed companies to address liquidity concerns and to take advantage of beneficial market conditions. A company saddled with burdensome debt obligations, for example, may seek to exchange existing notes for new notes with the same outstanding principal but with borrower-favorable terms, like delayed payment or extended maturation dates (a "Face Value Exchange"). Or the company might seek to exchange existing notes for new notes with a lower face amount, motivated by discounted trading values for the existing notes (a "Fair Value Exchange").
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