In addition to new legislation mentioned elsewhere in this round-up (see links to other sections), commercial and tech businesses and in-house counsel should note:

The Corporate Insolvency and Governance Act

IP licensing and insolvency reform: ipso facto clauses

Licensors of intellectual property rights may soon be unable to terminate licenses where the licensee has gone into an insolvency process.

What are ipso facto clauses and why do they matter?

What's the issue?

Many commercial contracts for the supply of goods or services contain clauses (known as ipso facto clauses) which allow a party to terminate in the event that the other enters into an insolvency process. Concerns have grown that termination under these circumstances restricts the ability of the company in trouble to engage in a successful restructuring or rescue (of either the company or the business) which can result in a negative impact on creditors.

What's the development?

How was the CIGB received?
Were there any concerns?
What has changed?
What else was proposed?
What's next?
A recap

After the Corporate Insolvency and Governance Bill (CIGB) was published on 20 May 2020, it raced through the House of Commons and House of Lords and, on 26 June 2020 (in under 6 weeks) came into force as the Corporate Insolvency and Governance Act 2020 (CIGA), with certain of the temporary measures taking effect from 1 March 2020.

How was the CIGB received?

Licensors of intellectual property rights may soon be unable to terminate licences where the licensee has gone into an insolvency process.

What are ipso facto clauses and why do they matter?

Permanent measures
Temporary measures

The much anticipated Corporate Insolvency and Governance Bill (the Bill) was published on 20 May 2020.

The much anticipated Corporate Insolvency and Governance Bill (the Bill) was published on 20 May 2020.

The proposed legislation is split into two broad categories: temporary provisions brought about as a result of COVID-19 and permanent provisions which will result in fundamental changes to UK insolvency law. The proposals, both temporary and permanent, reflect a shift towards a more debtor-friendly regime.

Building on measures already introduced in the Coronavirus Act – such as the moratorium on lease termination for non-payment of rent until 30 June 2020 – the Government announced that further emergency measures will be introduced.

Statutory demands and winding up petitions issued to commercial tenants to be temporarily voided

The forthcoming Corporate Insolvency and Governance Bill will include restrictions on the use of statutory demands and winding up petitions to recover sums owed by tenants.

Key Points

• A binding contract by exchange of email did not arise where parties were simply exploring a potential deal.

• Sale by auction is often appropriate where an asset is difficult to value.

• Where no differential treatment of creditors, unfair harm requires that a decision does not withstand logical analysis.

The Facts