The effects of the ipso facto restriction on lenders can be mitigated by the exploitation of other clauses in the loan agreement, since the restriction makes the provisions ipso facto (for example. B acceleration due to a delay event that specifically refers to the “procedure” referred to in Section 440 of the IRDA or the company`s insolvency) renders only unenforceable7. It does not render the whole agreement or other clauses unenforceable. If the ipso facto provision is nullified by the ipso facto restriction, other relevant contractual rights may continue to be exercised when there is another late event, the most obvious in the course of the loan, a non-payment or a violation of the financial agreement. The ipso-facto regime applies to one of the following procedures: at second reading of the Insolvency, Restructuring and Dissolution Act, the example was given: a developer and a principal contractor enter into a contract for the construction of a building when the contract contains ipso facto clauses authorizing the termination of the contract either to (1) the start of the restructuring procedure or (2) the non-compliance of the building. If the principal contractor is in a difficult financial situation and files an application for judicial administration, the promoter will not be subject to the ipso facto clause, as it is triggered by the filing of the application for an administrative court injunction. However, if, in addition to the restructuring procedure, the contractor does not fill the agreed building stone, the developer may, in this case, terminate the contract on the basis of the above clause.8 However, as soon as a company is subject to a transaction procedure or judicial administration, the moratorium established there may adversely affect the usefulness of these other contractual provisions. This provision applies when a company that is a party to a contract to supply goods or services enters into a “relevant insolvency procedure” defined as a moratorium, management, administrative failure, voluntary agreement, liquidation, interim liquidation or restructuring plan. In particular, the CIGA does not contain any regimes in this list, although its close counterpart, the new restructuring plan, is included. The decision to include liquidation is also interesting: although ipso facto has been useful in the case of commercial liquidation such as Thomas Cook or British Steel, such liquidations are not the norm. The objective of ipso facto being to support the rescue of a business as a current business or its activities, the approval of such interference in contractual rights in a typical liquidation, in which the company stops its activities almost immediately, is not justified. 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.
(e) any agreement relating to the liquidation or settlement of transactions related to a derivative contract; and the terms “obligation,” “obligation” and “union loan” are not defined in the Corporations Regulations or Corporations Act, which may, in some cases, give rise to questions of interpretation. The explanatory statement of the amending regulation provides that securities may include instruments such as bonds and financial products, including insurance.