What is now known as the ‘ipso facto regime’ was introduced by the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 in September 2017, which inserted a number of provisions that provided for a stay on the exercise of certain ipso facto contractual rights in the context of corporate restructuring and insolvency procedures.

What is an ipso facto clause?

Two recent court decisions may indicate more uncertainty with respect to the enforceability of “make-whole” premiums in bankruptcy. Make-whole or prepayment premiums are common within loan agreements, bond issuances and other debt instruments.

Corporate Australia is bracing for the long-awaited surge in insolvencies. As Australia’s largest creditor and, according to creditor reporting bureau Creditor Watch, responsible for the greatest number of company windups prior to the pandemic in 2019, the ATO can fairly be described as an influential, if not dominant, player in the restructuring and turnaround space and in corporate Australia more broadly.

The ATO effect

Contents:

Overview of corporate insolvency in Australia

On 28 September 2022, the Federal Government, through the Parliamentary Joint Committee on Corporations and Financial Services (the Committee) commenced an inquiry into the effectiveness of Australia’s corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy.

This article was first published by the Financier World Wide.

Largely due to the worldwide economic turmoil caused by the global coronavirus (COVID-19) pandemic, recent years have seen global business disruption on a grand scale – a scorched corporate landscape ripe for distressed mergers and acquisitions (M&A) practitioners to pick over.

Trends in traditional M&A activity

This 2022 review provides an overview of recent Australian Restructuring and Insolvency activity along with the laws, their application and recent trends and development in restructuring and insolvency activity.

Chapters:

In our original article, we prefaced that Johnson & Johnson (“J&J”) would likely utilize the Texas Two Step to attempt to resolve its tort liabilities related to talc powder.¹ On October 12, 2021, J&J did just that. The company used Texas’s divisive merger statute to spinoff the talc liabilities into a new entity, LTL Management, LLC (“LTL”).

Derivatives specialist Louise McCoach has authored the 2021 Australia chapter of the ‘International Comparative Legal Guide - Derivatives 2021’, which summarises the laws and regulations of derivatives in Australia. The chapter covers documentation and formalities, credit support, regulatory issues, insolvency/bankruptcy, close-out netting, taxation and bespoke jurisdictional matters and market trends in the Australian derivates market.

We discussed in the March 2020 edition of the Texas Bar Journal¹ the bankruptcy court ruling by Judge Craig A. Gargotta of San Antonio in In Re First River Energy LLC that oil and gas producers in Texas do not hold perfected security interests in oil and gas well proceeds, notwithstanding the Texas Legislature’s efforts to protect producers and royalty owners following the downturn in the 1980s. The Fifth Circuit recently reaffirmed Judge Gargotta’s decision.