COMPANY VOLUNTARY ARRANGEMENT

If your company is struggling to pay debts to its creditors but you believe that it has the potential to be a viable and profitable business again in the future, a Company Voluntary Arrangement (“CVA”) could provide an achievable company rescue solution.

A Company Voluntary Arrangement is a legal agreement between an insolvent company and its creditors, administered by a qualified insolvency practitioner. The CVA process allows an insolvent company to negotiate payment terms with its creditors for all or part of the debt over a period of time. CVAs work both for the company and its creditors.

They give the company and its directors space to breathe and the opportunity to work their way through their financial troubles; and they allow creditors to claim back money that they are owed.

As qualified and experienced insolvency practitioners, we can assess your company’s financial situation and determine whether a Company Voluntary Arrangement could be an effective solution to your company debt problems. We then act on your behalf and negotiate with your creditors to come to an agreement on payment terms and establish a Company Voluntary Arrangement.

Whilst a CVA may sound like the perfect solution to company debt problems, it is important to understand that they are not a viable solution for all insolvent companies. There are some criteria which must be met before a CVA can be considered:

The company must have a realistic prospect of recovery and becoming viable again in the future.

The company should have projected cash flow forecasts that indicate there will be enough capital to cover the agreed upon repayment amounts.

WHAT IS THE PROCESS FOR SETTING UP A COMPANY VOLUNTARY ARRANGEMENT?

The process for setting up a Company Voluntary Arrangement (CVA) begins with contacting an insolvency practitioner. So if your company is going through financial difficulties and you think that your company may be eligible for a CVA, get in touch with us ASAP via email, telephone or online chat and we can get the process started.

• Firstly we will assess your company’s circumstances by carrying out a review of the company, its operations and its assets. We will determine its potential cash flow and create financial projections based on this information. We will then be able to advise you on whether a CVA would be a viable company rescue solution for your business.
• Then we will draft a CVA proposal for your creditors, based on what your company will realistically be able to pay in regular amounts over a fair amount of time. This will depend on the level of debt owed by the company and its ability to make repayments based on current + future cash flow projections.
• If a CVA proposal is agreed upon with the directors, we will send it to all of your creditors and file it at court.

• Then we will convene creditors’ and shareholders’ meetings. During the creditors meeting we will discuss the CVA proposal with your creditors and give them the opportunity to ask questions or request amendments to the CVA proposal.
• Please note that least 75% (by value) of voting creditors must agree to the CVA for it to be legally binding.
• If the voting thresholds are met at the creditors’ and shareholders’ meetings and the CVA is approved, then we will issue a report to all of your company’s creditors and to the court. In this report we will detail what happened during the meeting, which parties were present and how each party voted. At this point the Insolvency Practitioner becomes the Supervisor of the CVA.
• Upon approval of the CVA, all legal actions being taken against your company are halted and no further legal action can be taken against your company unless you fail to keep to the terms of the CVA.
• Finally, the repayment process begins. Payment is generally made via monthly contributions to the Supervisor. This money is then distributed to all of your creditors, who have submitted claim in the CVA.