Restructuring A Company? We provide support and services for all the options you need to consider
Company Voluntary Arrangement
A CVA is a legally binding agreement between the company and its creditors. A CVA is an excellent solution and way of restructuring the business debts and, in some cases repaying the debt over an extended period.
A CVA is a solution that supports the continued trading of a business while ensuring the company can sustainably repay some or all of its debts over a fixed term.
For a CVA to be formally accepted, the business must evidence it is solvent and sustainable. A licensed insolvency practitioner conducts the assessment of the company’s affairs to ensure the best advice.
For a CVA to be approved, 75% of the lenders (by value) must vote in favour. The outcome of a CVA is based on the creditors receiving a detailed proposal from the acting insolvency practitioner; this outlines the sustainability of the business and what the company is proposing to repay over an agreed payment term.
Once the CVA is formally in place, the company and its assets are legally protected, and the company is left to repay one affordable payment.
The acting insolvency practitioner will manage and distribute payments between creditors, keeping both the company and creditors up to date throughout the duration of the CVA.
One of the main benefits of the CVA is that the directors can focus on rebuilding the business as a pose to being chased by creditors and avoiding any legal proceedings against the company.
The company must comply with the terms of the CVA and maintain one monthly payment; in return, the creditors will cease all contact, any pending legal action will cease, and the business’s financial position will be assessed regularly to ensure the sustainability.
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