Corporate Recovery & Insolvency

Company Voluntary Arrangements (CVA)

Where a fundamentally viable company faces a solvency crisis a CVA can be a very powerful tool. A CVA is a "deal" between a company and its creditors to repay them from future profits or from the proceeds of sale of assets that are no longer required within the business.

The deal is based on identifying the matters that have caused the solvency crisis and ensuring that they are addressed. The business must have a viable future and cashflow projections are required. The deal preserves the company and it's business and promises either partial of full payment to creditors over a period of time.

The directors retain control of the company, unless the CVA specifically grants powers to the Supervisor of the CVA. The business is given a fighting chance of survival and, usually, personal guarantees are not called upon.

The process of entering into a CVA is governed by the Court although the Court plays no active role in deciding whether the arrangement is approved by creditors. To be approved, the proposals must have the support of 75% of creditors who cast their vote at a meeting of creditors. During the period between the meeting being called and taking place, the Insolvency Practitioner is able to canvass the views of creditors and, if necessary, propose amendments to secure the approval of the CVA.

Once approved, the creditors who are bound by the CVA can take no other action against the company in respect of their debts.

Insolvency

• Creditors' Voluntary Liquidation
  
• Members' Voluntary Liquidation
  
• Company Voluntary Arrangements
  
• Administration Orders
  
• Receivership
  
• Individual Voluntary Arrangements
  
• Trustee in Bankruptcy
  
• Advice to Debtors
  
• Informal Arrangements
  
• Advice to creditors