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Scott Abel

This chapter considers the treatment of executory contracts upon the default of a debtor company under the law of New Zealand and the main factors behind the most recent reforms in the area. Insolvency law reform throughout the last decade in New Zealand has been largely ad hoc and the trend as to upcoming reform appears to be no different. The main drivers of reform in this area have been to both achieve conformity with other countries (particularly Australia) and to both achieve efficiency and provide a greater level of certainty to a company's creditors. Advocates of the reforms that have been effected in the last decade have included national government, insolvency professionals, lawyers and many other interested parties. Despite a number of wide-ranging reforms, other than the very few exceptions described above, there is currently no prohibition on the operation of ipso facto clauses in New Zealand, the result of which is that executory contracts are often terminated in the event of a party entering insolvency.