Companies Act 2014

F281[Restrictions on certain contracts during examinership

520A

520A. (1) In respect of any executory contract concluded between a creditor and a company to which the circumstances in paragraphs (a) to (c) of section 509(1) apply, the creditor shall not –

(a) withhold performance of,

(b) terminate,

(c) accelerate, or

(d) in any other way modify,

the contract to the detriment of the company, notwithstanding any contractual clause to the contrary, solely by reason of –

(i) the making of an application by petition to appoint an examiner to the company under section 509,

(ii) the appointment of an interim examiner to the company under section 512,

(iii) the appointment of an examiner to a related company to the company under section 517, or

(iv) the company being placed under the protection of the court under section 520.

(2) For so long as a company is under the protection of the court in a case under this Part, any creditor with a claim to which section 520 applies shall not, in respect of any essential executory contract concluded between that creditor and the company –

(a) withhold performance of,

(b) terminate,

(c) accelerate, or

(d) in any other way modify,

the contract to the detriment of the company, solely by virtue of the fact that the company is deemed to be unable to pay its debts within the meaning of section 509(3).

(3) In this section –

"executory contract" means a contract between a company and one or more creditors under which the parties still have obligations to perform at the commencement of the period referred to in section 520(2);

"essential executory contract" shall have the same meaning as it has in Article 7(4) of the Preventive Restructuring Directive.]

Annotations:

Amendments:

F281

Inserted (27.07.2022) by European Union (Preventive Restructuring) Regulations 2022 (S.I. No. 380 of 2022) reg. 12, subject to restriction on application in reg. 3.