Be Careful What You Wish For! Evaluating the Ipso Facto Reforms

Harris, J., Symes, C. (2019). Be Careful What You Wish For! Evaluating the Ipso Facto Reforms. Australian Journal of Corporate Law, 34, 84-102.

U. of Adelaide Law Research Paper No. 2019-91

Posted: 9 Jul 2019 Last revised: 12 Jul 2019

See all articles by Jason Harris

Jason Harris

The University of Sydney Law School

Chris or Christopher Symes

University of Adelaide - Law School

Date Written: July 9, 2019

Abstract

A successful corporate rescue will usually require retaining at least some of the value of contracts for supplying goods and services to the company being restructured as well as contracts that that company has with its customers. Ipso facto clauses make restructuring more difficult because they give the contractual counterparties leverage over the restructuring effort which can give the counterparty an advantage over other creditors. In an attempt to facilitate restructuring, the Parliament has introduced amendments to stay ipso facto clauses during restructuring efforts. However, this article argues that rather than encouraging and supporting restructuring efforts, the complex amendments are likely to make restructuring less certain and more difficult.

Keywords: corporate rescue, counterparties, ipso facto

JEL Classification: K1

Suggested Citation

Harris, Jason and Symes, Christopher, Be Careful What You Wish For! Evaluating the Ipso Facto Reforms (July 9, 2019). Harris, J., Symes, C. (2019). Be Careful What You Wish For! Evaluating the Ipso Facto Reforms. Australian Journal of Corporate Law, 34, 84-102.; U. of Adelaide Law Research Paper No. 2019-91. Available at SSRN: https://ssrn.com/abstract=3416980

Jason Harris

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

HOME PAGE: http://https://sydney.edu.au/law/about/people/profiles/jason.harris.php

Christopher Symes (Contact Author)

University of Adelaide - Law School ( email )

Australia
+6183134452 (Phone)

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