Creditor’s Guide to Company Voluntary Arrangement (CVA)
We help creditors achieve a greater return from Company Voluntary Arrangements (CVAs).
A Company Voluntary Arrangement (CVA) is a formal contract between an insolvent company and its creditors. By arranging a repayment plan over 3 to 5 years, they enable a company to maintain its trading operations while satisfying its creditors.
Benefits of a Company Voluntary Arrangement
Creditors often inquire about the option of placing the company into liquidation and selling the assets to repay them. However, this is never the case since creditors in liquidation always receive less money compared to those involved in a Company Voluntary Arrangement.
Moreover, in liquidation, there is no opportunity to generate income from future business. On the contrary, if the company is doing well and experiencing great profits three years into a CVA, the facilitating insolvency practitioner can enhance the amount that creditors receive in their monthly payments.
What is the process for approving a CVA proposal?
To approve a Company Voluntary Arrangement, a group of creditors owed at least 75% of the debt must vote in favor of the proposal.
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I&L can provide advice, support, and recommend a commercially-minded insolvency practitioner to act in their best interests. Call 020 7504 1300 now for free and confidential advice…