In his article titled “Ipso Facto Clauses in Executory Contracts,” which was featured on the front page of the July 2016 issue of the Dallas Bar Association’s Headnotes newspaper, Jacob Sparks shares insights on Bankruptcy Code and how it affects ipso facto clauses.
Jacob writes: “An ipso facto clause—sometimes called a termination-on-bankruptcy provision—is a contractual or other provision conditioned on a debtor’s bankruptcy, insolvency, or financial condition, or the appointment of a custodian, that results in a loss of property rights or the elimination or limitation of obligations that existed prior to the triggering event or condition.” He continues: “Although many contracts contain ipso facto clauses, as a general rule, the Bankruptcy Code bars the enforcement of such clauses in executory contracts.”
Jacob Sparks, an attorney in the Spencer Fane Dallas office, is a litigator whose practice focuses on complex commercial disputes and bankruptcy negotiations and litigations. His experience spans various economic sectors and industries, including energy, finance, real estate, insurance, and technology. Jacob received his juris doctorate from the University of Oklahoma College of Law.
To read the full article, click here.