Chapter 2, Section 20 of the Company Reorganisation Act specifies how a debtor's existing contracts should be handled in a corporate reorganisation. Contracts are naturally an important asset for a company undergoing reorganisation. The primary aim of this rule is to facilitate reorganisation, but also to protect the debtor's counterparty against financial loss.
The Supreme Court recently delivered a decision regarding title retention of IP rights, ruling that a buyer of an IP right receives protection towards the seller's creditors through the agreement and that there is no need for a separate perfection measure. Therefore, by analogy, there is no need for a perfection measure in order to uphold a contractually valid termination given before the buyer entered into bankruptcy.