Company voluntary arrangements

• A CVA is a powerful tool that can be useful for creating a breathing space from creditors' actions whilst an orderly reconstruction or disposal of assets takes place or simply to allow the company to survive by achieving profitability and making contributions to repay creditors over a period of time.
• A CVA has to involve either a composition (i.e. creditors receiving less than they are owed) or a scheme of arrangement (i.e. a rescheduling of the company's liabilities).
• The terms are binding on all creditors if the requisite majorities approve the terms at a meeting. In either case, creditors would need to be convinced that it offered a better outcome than a winding up to be prepared to approve it.
• CVAs work well in many situations because they are flexible and can be tailored to the particular circumstances. Where they tend to fail, it is because the directors leave it too late, the company's business is inherently not viable, because management deficiencies are not addressed or because the company cannot find the necessary funding for trading, including taking into account more restrictive terms from concerned suppliers.

KIS can provide you with prompt and constructive advice if you are experiencing financial difficulty or simply need to explore financial options.

The sooner you seek advice from an experienced specialist, the greater the opportunity to reverse financial difficulties or resolve monetary issues.

KIS provide initial explorative consultations, held at our offices, which are undertaken free of charge and overseen by one of our two experienced and licensed Insolvency Practitioners.

Act now and contact KIS today to arrange a consultation

Tel: +44 (0)208 441 2000
E-mail: kis@kelmanson.com