The amending law is supplemented by the instruments that prescribe the types of contracts and rights excluded from the operation of the stay. Given the scope of the legislation, the exceptions provided by the acts are essential to define the scope of ipso facto regulation. Ipso is only intended for contracts to supply goods and services. The ipso facto provision is therefore stricter than its Chapter 11 equivalent in the United States, which generally applies to all enforcement contracts (subject to form). This discrepancy is due to the conflicting judgments of the US and British courts in Belmont Park Investments PTY Ltd v. BNY Corporate Trustee Services Ltd, in which a subordination or “flip” clause (an ipso facto clause that effectively nullified the priority of the parties in the payment water case) was found to be valid and applicable by the Supreme Court of the United Kingdom Pointed out. but was found unenforceable by the U.S. Bankruptcy Court under the U.S. Bankruptcy Act. Given the narrow scope of CIGA`s ipso facto provision, the Belmont case would continue to be decided in the same manner, showing a persistent difference between the two regimes. APLMA has issued a number of drivers out of the changes to its bilateral and syndic facilities agreements to address this issue. Overall, APLMA recommends that the following clause be included in the guarantee: The good news for financiers is that there are a number of exceptions that allow the application of rights under a financing agreement, despite the legal stay.
This may be due either to the type of funding or to the specific right of execution. Some important exceptions are listed below. In this context, the amending regulations contain a clarification, including the condition that contracts resulting from innovations, divestitures and modifications of contracts before 1 July 2018 are also excluded from the ipso facto regime, provided that innovations, divestitures and modifications are concluded before 1 July 2023. This differs from the position in the exhibition projects, which had not previously limited the exemption to the five-year period. On July 1, 2018, provisions were inserted into the Corporations Act 2001 (Cth) , known as “Ipso Facto” reforms that prevent a party from exercising its contractual right to suspend or terminate a contract when the consideration is subject to certain insolvency provisions (including administration, bankruptcy and settlement plans). , but not liquidation). This stay extends to financiers who accelerate their loans and terminate the loan agreement due to relevant insolvency trigger events, unless a specific exception applies. Part 2 of the Amendment Act amended the Corporations Act 2001 (Corporations Act) to July 1, 2018 by adding a number of specific sections providing for the operation of the ipso facto stay in certain restructuring and insolvency proceedings. In addition, the ipso facto provisions also allow the competent judicial administrator to apply for a stay in order to prohibit the exercise of rights (for example. B a right of termination for convenience), even if the law does not operate explicitly on the basis of one of the prohibited grounds mentioned above, if the court is satisfied that a counterparty can probably exercise those rights for a prohibited reason.
The terms “obligation,” “obligation” and “union loan” are not defined in the Corporations Regulations or Corporations Act, which in some cases may give rise to questions of interpretation.