CVA (Company Voluntary Arrangement)

A Company Voluntary Arrangement (CVA) consists of a deal between the company and its creditors to repay them from future profits and is a deal designed to preserve the company, rebuild sales and profits and pay something back over a period of time to be agreed. The company directors remain in control and personal guarantees do not get called in. A well-structured CVA is a beneficial tool to ensuring the survival of a business.

A successful CVA is based on:

• A commercially structured deal
• Appropriate levels of working capital in addition to debt restructuring
• A determination to make the company arrangement work

Directors must understand that the creditors’ objectives are paramount when putting together the arrangement.

If the business has a viable future, there is an acceptance of the need for change, the directors are prepared to fight for survival and appropriate funding can be found, then a CVA is an exceptional tool.

An arrangement can be proposed by the directors of the company but, when a company is in liquidation or administration, then the liquidator or administrator can propose the arrangement. However, it can only be proposed if the company is insolvent.

To discuss Company Voluntary Arrangements (CVA) call Phil or another member of our team on 0333 014 3454. Alternatively, visit one of our local offices or email us: insol@bcr-insolvency.co.uk