Episode 5 – Insolvency Reform: Termination on Ipso Facto of Supply Contracts

Sweeping changes to the UK’s insolvency regime became effective on 25 June 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 in the midst of 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 favours financial services firms.   This podcast is provided as a service of Latham & Watkins LLP. Listening to this podcast does not create an attorney client relationship between you and Latham & Watkins LLP, and you should not send confidential information to Latham & Watkins LLP. While we make every effort to assure that the content of this podcast is accurate, comprehensive, and current, we do not warrant or guarantee any of those things and you may not rely on this podcast as a substitute for legal research and/or consulting a qualified attorney. Listening to this podcast is not a substitute for engaging a lawyer to advise on your individual needs. Should you require legal advice on the issues covered in this podcast, please consult a qualified attorney. Under New York’s Code of Professional Responsibility, portions of this communication contain attorney advertising. Prior results do not guarantee a similar outcome. Results depend upon a variety of factors unique to each representation. Please direct all inquiries regarding the conduct of Latham and Watkins attorneys under New York’s Disciplinary Rules to Latham & Watkins LLP, 885 Third Avenue, New York, NY 10022-4834, Phone: 1.212.906.1200