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Company Voluntary Arrangement

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Administration
Company Voluntary Arragement
Turnaround

Example
An engineering company with debts in excess of £250,000 that made losses due to branching into a new type of precision engineering.  The CVA proposals provided for the loss making division to be sold, the company to return to core engineering for solid blue chip clients.  The CVA was successfully concluded after 4 years paying monthly contributions of initially £1,500 increasing to £2,000 in later years.
Your client’s company can:-

• Freeze its debt and any interest charges
• Repay the debt in affordable monthly installments
• Prevent creditors from taking further action against your company
• Write off a proportion of the company's debts with creditors' consent

The CVA can be tailored to suit the company's and creditors' needs. It could involve a five year payment plan or a full and final settlement in the form of a lump sum to creditors or a combination of the two.
The CVA avoids the need for liquidation, can save jobs and investments. A further advantage is that the Supervisor is not required to investigate the directors' conduct nor submit reports to the Dti as in liquidation. However, if the directors' conduct has been severely lacking, the Supervisor will need to advise creditors of this and this could effect creditors desire to support the CVA.