A CVA is a formal business rescue procedure whereby a company experiencing financial difficulties makes a proposal to its creditors to provide a better return to the creditors than they would achieve in a liquidation and can enable a company to continue to trade.
Company Voluntary Arrangement (CVA)
WHAT IS A COMPANY VOLUNTARY ARRANGEMENT?
THE PROPOSAL
A CVA proposal is prepared by the company director(s) with the assistance of a licenced insolvency practitioner. The proposal is sent to known company creditors for approval by way of a decision procedure usually by a virtual meeting.
In order for a proposal to be approved more than 75% of those creditors who vote on the proposal must agree. Once that threshold has been reached, all creditors will be bound by the terms of the proposal.
Once approved, the creditors are unable to take any recovery action against the company even those that rejected or did not vote at the meeting.
The licensed insolvency practitioner will act as a supervisor of the arrangement and will monitor the company and distribute the funds as per the terms of the proposal.
LET'S WORK TOGETHER
If you would like to understand the CVA process in greater detail, please call our head office on 01992 392030 to speak confidentially with one of our directors or email [email protected]
