Company voluntary arrangements (CVA)
A CVA is a formal alternative for businesses seeking to avoid liquidation by negotiating repayments to its creditors over a set period. As part of this legally-binding procedure, an insolvency professional is employed by the company. As well as enabling payments to its creditors, the procedure gives some breathing space to the company, offering the potential for it to survive as a viable concern.
The team at Streets SPW will explain the process in detail and provide professional advice to help you decide whether or not a voluntary arrangement is best for you.
How can a CVA help?
A CVA can rescue a company and avert the stigma and consequences of liquidation. Should you wish to take this course of action after speaking to a member of the team at Streets SPW, a proposal needs to be actioned under which creditors agree to accept a full/part repayment schedule over a set period of time. The proposal requires the approval of 75% or more (in value) of those creditors present and voting in person or by proxy at a meeting of creditors and also a majority of the unconnected creditors.
The company can continue trading during the CVA, which is managed by an insolvency practitioner acting as the supervisor. Once the proposal for a CVA has been approved, the arrangement has been completed and the necessary reports provided, the company’s liability to its creditors is cleared. The CVA ends once it has successfully complied with the terms of the proposal or when it is considered to have failed.
One of the major differences between a CVA and liquidation is that once a CVA has been successfully completed, the company is still ‘alive’. Therefore, it has not actually been wound up but could nevertheless go into liquidation at a later stage.
For expert professional advice on CVAs, speak to a member of the friendly team at Streets SPW today. Over the years, we have helped numerous companies take control of their debts and move forward towards a more successful future.