A Company Voluntary arrangement (CVA) is an agreement that is reached between an insolvent company and all of its creditors. The company declares itself insolvent to the creditors and offer a set amount that they believe they can pay. This amount will be a certain number of pence in each pound that it owes. If more than 75% of creditors agree to this, then the CVA will be implemented and the original debt wiped off in favour of the new amount.
Before the Company voluntary arrangement (CVA) proposal is made, an application can be made to court for a moratorium which prevents creditors from taking action against the company or its property for up to 28 days.
If approved a Company voluntary arrangement (CVA) is binding to all creditors who had notice of the meeting and were entitled to vote.
If the meeting of creditors and shareholders approves a Company voluntary arrangement (CVA), the nominee (or other insolvency practitioner), becomes the supervisor of the Company voluntary arrangement (CVA).
Once the Company voluntary arrangement (CVA) has been carried out, the company’s liability to its creditors (who had notice of the meeting of creditors) is cleared. The company can continue trading during the Company voluntary arrangement (CVA) and afterwards. A Company voluntary arrangement (CVA) can be set up when a company is in liquidation or in an administration, as well as at any other time.
Finance7 will evaluate whether a CVA is the best option for your company and if so we will prepare the necessary information in manner that will maximise the chances of Creditors accepting the proposal