Contracts, agreements, arrangements and rights to which the stay on enforcing ipso facto clauses does not apply; final Regulations and Declaration published
The reform and its progress
From 1 July 2018, the stay on reliance by solvent counterparties on “ipso facto” clauses in voluntary administration, certain receiverships and creditors’ schemes of arrangement will come into effect. A number of the exceptions to that stay – a critical feature of this reform, particularly for financiers and insolvency practitioners – have now been legislated, after a consultation period conducted by Treasury earlier this year. An overview of those exceptions is set out below.
You can read further detail on this reform (and the insolvent trading ‘safe harbour’ defence) in our earlier client note published in September 2017, available here. Background to the consultation process on the proposed exceptions to the stay is set out in our April 2018 alert, available here. Read more…