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The reform

From 1 July 2018, the moratorium on reliance by solvent counterparties on “ipso facto” clauses in voluntary administration, certain receiverships and creditors schemes of arrangement will come into effect (unless it is proclaimed to commence earlier, which is not presently expected).

In summary, the ipso facto moratorium (or stay) will mean that there will be stays on the enforcement of rights against companies the subject of schemes of arrangement, voluntary administration and receivership if those rights have become enforceable only because of the fact of the company becoming subject to such arrangement. This prohibition include, for example, rights to terminate contracts or accelerate payments due by the debtor company due to such occurrences.

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