A Company Voluntary Arrangement (‘CVA’) is a recognised legal procedure, whereby a company enters into a legally binding agreement with its creditors to repay its liabilities, either in part or in full over a period of time, while allowing its directors to retain control of the company.
Generally the company agrees to pay creditors a certain amount in the pound over a period of three to five years however this is specific to each case.
CVA’s are useful where the existing business as a result of various factors has accumulated debt which it cannot afford to pay, the business is viable but it cannot repay its existing debt in full. Creditors benefit from the continued trading relationship and are able to recover some of the old debt which would not be realisable otherwise.
We have greater success in obtaining approval for CVA’s if we are contacted sooner rather than later.
Only a licensed Insolvency Practitioner can be appointed Supervisor of a CVA.