Lender-on-lender violence has been noted more in recent news, and have been increasingly used in out-of-court restructurings in recent years including during the COVID-19 pandemic.
When are Ipso Facto Clauses and Golden Share Arrangements Enforceable in Bankruptcy? “Termination on bankruptcy” provisions—ipso facto clauses—are commonly used in many types of business contracts, providing for the termination of the contract (either automatic or at the non-debtor party’s election) upon the obligor’s filing of bankruptcy or the occurrence of similar events or conditions. However, generally, such clauses are not enforceable in the bankruptcy context, because as a matter of policy, debtors should be allowed access to the protections accorded to debtors under the Bankruptcy Code. In some types […]