Sweeping changes to the UK’s insolvency regime became effective June 25, 2020, curtailing the ability of parties to terminate commercial contracts for the delivery of goods and services on the grounds, ipso facto, of the other party’s insolvency. Coming amid the COVID-19 pandemic, this change is particularly important for companies that depend on third-party service providers for critical business functions. This podcast is the first in a three-part series looking into the practical effects of the UK’s insolvency reforms that have rendered these ipso facto clauses unenforceable.
In this episode of Connected With Latham, Andrew Moyle, Data and Technology Transactions partner, talks with London partner Jessica Walker and New York partner Adam Goldberg from Latham’s Restructuring and Special Situations team about some of the measures introduced by the UK government and the impact on commercial contracts, as well as existing insolvency-related regimes in the UK and the US. We also examine the implications of a carve-out to the ipso facto restrictions that favors financial services firms.