Company Voluntary Arrangement (CVA)
A CVA is a formal agreement between the Company and its creditors which is supervised by an Insolvency Practitioner allowing the deferral of repayments to creditors over a period sustainable to the Company. This process might include an element of debt forgiveness.
Proposals are forwarded to your Creditors outlining the contributions you can afford and the timescale for the Arrangement to run its course. These are then agreed at a meeting of the Company’s Creditors.
The Benefits of a Company Voluntary Arrangement
- A CVA allows the Company to continue to trade under its existing directors.
- A CVA Supervisor provides monitoring and expert advice to the Company and its directors during its duration.
- The costs of instructing professionals associated with a CVA are generally lower than an Administration.
- A CVA is a cheaper alternative to raising further finance by avoiding charges, costs and interest.
- CVA is particularly useful for those businesses that have external licences or agreements in place which will be breached in an Insolvency Process, such as Operators Licences in the motor trade or haulage industry.
- Creditors included in the CVA are bound by its terms and are unable to commence any enforcement actions.
- Practically it has been useful in dealing with Company’s financial position where a Company’s assets have a significant value whereby the existing management are unable to purchase it back through an Administration.
To discuss all options available to you and your business contact one of our directors on 0800 955 3595.