This 2nd article in our 2-part series on ‘Employment Contracts vis-à-vis CIRP’ examines the validity of ipso facto clauses which permit employees to terminate their employment on the occurrence of an insolvency event; and acknowledges the duelling priorities of upholding contractual freedom and ensuring that the debtor remains a ‘going concern’.

The first reported decision on the ipso facto stay provisions of the Corporations Act provides clarity that they operate as intended in voluntary administration – leaving the trickier issues for another day.

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?

Background

Legal Update:

Introduction

The first reported decision on the ipso facto stay provisions of the Corporations Act provides clarity that they operate as intended in voluntary administration – leaving the trickier issues for another day.