UK Corporate Insolvency and Governance Act 2020: what the aviation industry needs to know about the ban on the operation of ipso facto clauses
28 September 2020
The Corporate Insolvency and Governance Act (the Act) which entered into force on 26 June 2020 represents the most significant insolvency reforms in the UK for a generation.
In addition to some temporary measures addressing the economic fallout from Covid-19, the Act introduces permanent reforms in three key areas: (1) the introduction of a new statutory moratorium (Moratorium); (2) a ban on the operation of termination clauses in supply contracts triggered by insolvency proceedings (or so called ipso facto clauses); and (3) the introduction of a new pre-insolvency rescue and reorganisation procedure (the Restructuring Plan). Our detailed analysis of the various measures introduced by the Act can be accessed here.
In a three part series of bulletins, we analyse the implications of each of these permanent measures for the aviation industry. This second bulletin, co-authored by partners Jennifer Marshall and Paul Nelson and, associate Harini Viswanathan focusses on the implications of the ban on the operation of ipso facto clauses for airlines, lessors and financiers.