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Company Voluntary Arrangement (CVA)

A Company Voluntary Arrangement is frequently undertaken by directors who feel their company has a viable future and are prepared to work hard to keep their company trading.

A Company Voluntary Arrangement is a formal process enabling a compromise to be entered into between a company and its creditors, based on a vote passed by a majority of creditors greater than 75% of those voting on the proposal.

All creditors are then legally bound to accept the terms of the Company Voluntary Arrangement, including those who were non-voting or did not receive notice of the meeting.

A Company Voluntary Arrangement is a strategically valuable tool, particularly where there are dissenting minorities – and as licensed insolvency practitioners, we can accept appointment as nominees and supervisors of CVAs.

The Company Voluntary Arrangement would ensure that the amounts owed to the company’s current unsecured creditors were frozen. Creditors usually accept between 25 per cent and 100 per cent of monies owed to them.

Once the Company Voluntary Arrangement has been approved the company will have to make the agreed payments. These stipulated amounts which the company have already sanctioned when the arrangement was set up, will be realistic expectations from future profits of the business.

 

 

 

 

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