IPSO FACTO: the proposed law reforms panel discussion

Ipso facto panelist: Rowena White (Herbert Smith Freehills), Jason Tracy (Deloitte), Renee Boundy (Allens) and Margot Branson (Macquarie Group) On Thursday 17 May 2018, the Turnaround Management Association of Australia and the Asian Pacific Loan Market Association (APLMA) hosted a panel to discuss the ipso facto law reforms. The stay on the operation of ipso facto clauses (i.e. clauses that allow you to terminate a contract if your counterparty is in financial difficulty) will have an impact on a broad range of contractual arrangements and industries across Australia.

Addressing a full house from both the front end of the loan markets and the back end restructuring and turnaround community, the expert panel led by Paul Apathy (Herbert Smith Freehills) and consisting of Rowena White (Herbert Smith Freehills), Jason Tracy (Deloitte), Renee Boundy (Allens) and Margot Branson (Macquarie Group), gave insights into how people were engaging with the proposed ipso facto reform and where they were seeking clarity.

Before the presentation began, the audience was asked: “how much do you do you know about ipso facto?” To which, 63% of attendees responded: “I’ve heard of it, but I don’t know much more than the general concept.” This set a challenge for the panel, one that they accomplished thoroughly.

Another question, “how will the new ipso facto regime impact the provision of credit in Australia” was posed to the audience before and after the presentation. Interestingly, after the presentation, more people were of the view that the whole regime discussion was overblown and it will probably not have much effect. However, some were of the view that it is very problematic for lenders.

The evening resulted in the consensus that the ipso facto reforms will probably not have a major impact on business as usual for the majority of TMA and APLMA members.

However, with the July ipso facto update still being a live document, the insights gained through the evening will give attendees the knowledge to adapt to the new legislation when it is brought into law on 1 July this year.

Thank you to Paul Apathy and our panel members, the attendees, APLMA and our host Herbert Smith Freehills for making the night possible.