The Singapore High Court recently issued the first-ever super-priority order for debts arising from rescue financing under Section 211E(1)(b) of the amended insolvency laws in the Companies Act. The decision shows that the court is open to adopting relatively unique deal structures, and could be a benefit for more business-centric solutions.

In Part 1, we discussed how, despite widespread usage, termination in the event of bankruptcy clauses (“ipso facto” clauses) are generally unenforceable pursuant to the bankruptcy code. In this second part, we discuss why these clauses are still prevalent in commercial transactions and the exceptions that allow for enforceability in certain situations.

Why Do Ipso Facto Clauses Remain in Most Contracts?

If ipso facto clauses are generally not enforceable, then why do practically all commercial agreements continue to include them? There are several reasons.

Practically all commercial transactions, including licenses, services agreements, and supply agreements, contain a provision that triggers termination rights, without notice, to a party whenever the other party files for bankruptcy or experiences other insolvency-related event. In Part 1 of a two-part series, we discuss how the commonly used termination-on-insolvency clauses are generally unenforceable despite their widespread use.

Standard Ipso Facto Provision

The EU Parliament adopted the Directive on future "Preventive Restructuring Frameworks", which creates the basis for uniform preventive restructuring across the European Union and will fundamentally change how companies deal with financial difficulties and restructuring.

Until now, the EU has suffered from a regulatory patchwork in this area with no regulations in some markets and sophisticated procedures in others. The new directive mitigates the dangers and risks posed by the former uneven regulatory landscape.

The EU Parliament adopted the Directive on future "Preventative Restructuring Frameworks.

This creates the basis for a uniform legal framework for preventive restructuring within Europe. To date there has been a "patchwork" of regulations in the EU: in some cases there are no regulations at all, in others there are sophisticated procedures in place. The new directive now counteracts the dangers and risks of such regulatory differences.

Welche Stolpersteine drohen, wenn einige Arbeitnehmer noch nach der Betriebsstilllegung für Abwicklungsarbeiten benötigt werden, zeigt der Fall Air Berlin.

Als Air Berlin im November 2017 Insolvenz anmeldete, war das Schicksal der rund 6.000 Arbeitnehmer eine der in der Presse am meisten diskutierten Fragen. Bereits ein halbes Jahr später hatten etwa 3.000 von ihnen einen neuen Arbeitsplatz gefunden, die meisten bei anderen Fluggesellschaften. Hunderte andere wurden zunächst in Transfergesellschaften betreut.

Welle von Kündigungsschutzklagen

BAG befragt EuGH zur Haftungseinschränkung des Erwerbers im Bereich der betrieblichen Altersversorgung bei einem Betriebsübergang aus der Insolvenz.

In retail bankruptcies, it is important for suppliers consigning goods to merchants to be aware of the commercial law rules governing consignments. Disputes among consignors, inventory lenders, and bankruptcy debtors have been arising frequently in retail bankruptcy cases. Disputes like these can be avoided if consignors consider the basics of commercial law rules governing consignments, particularly under the Uniform Commercial Code, and take steps to protect their rights and interests.

Die neue Reform des Insolvenzanfechtungsrecht durch den Gesetzgeber löst einige Rechtsfragen des BAG und BGH zugunsten von Arbeitnehmern.

Insolvenzgeld – ein wichtiges Instrument zur Sanierung von Unternehmen und Erhalt der Mitarbeitermotivation. Wie ist der rechtliche Rahmen?