Rescue Your Company – Company Voluntary Arrangement

Company voluntary arrangements in England and Wales

A company voluntary arrangement, or CVA, is a formal arrangement for dealing with company debts on agreed terms. It may allow a viable business to continue trading while making payments it can afford. An insolvency practitioner is needed to prepare and supervise the arrangement.

BusinessRescueExpert assesses whether the company has a realistic recovery plan before recommending a CVA. Discuss the options or call 0333 939 80 40.

When a CVA may work

A CVA needs a credible business plan and enough cash to meet ongoing trading costs as well as the proposed contributions. We will examine why the debt arose, cashflow forecasts, creditor positions and the changes needed to make the business sustainable. A proposal should be built around the company’s circumstances.

How creditors decide

Creditors receive the proposal and vote. Approval normally requires at least 75% by value of the creditors voting to support it, with a further safeguard concerning opposition from unconnected creditors. The position of secured and preferential creditors also needs to be considered.

The amount repaid, payment schedule and any debt reduction depend on the approved terms. There is no standard percentage that every company can write off. The proposal must explain what happens if the company cannot keep to its commitments.

What the directors need to do

Directors usually continue running the business while the insolvency practitioner supervises the arrangement. They need to provide reliable information, implement the agreed changes and keep the company’s new obligations up to date. If the arrangement fails, creditors may be able to pursue recovery and the company may face liquidation.

Costs and alternatives

There are costs for preparing a proposal and supervising an approved CVA. We will explain the fee basis, funding and effect on the proposed payments before you proceed. A CVA will not be suitable for every company. We can assess other options, including an informal agreement, administration or CVL.

Prepare for an initial assessment

Send us recent accounts, a cashflow forecast, a creditor list and details of any urgent action. Contact BusinessRescueExpert for an initial assessment. For a Scottish company, visit Lennox Insolvency.

How creditors decide
What the directors need to do
Costs and alternatives
Prepare for an initial assessment

Speak to an Expert

Common questions about company voluntary arrangements

How much debt can a CVA write off?

There is no standard percentage. The amount repaid, payment schedule and any debt reduction depend on the approved proposal, affordability and the creditors’ decisions.

Will a CVA be automatically accepted?

No. Creditors vote on the proposal. Approval normally requires at least 75% by value of creditors voting, with a further safeguard for opposition from unconnected creditors. Secured and preferential creditors require separate consideration.

Can the company continue trading?

A CVA may allow a viable business to continue trading. The company needs enough cash to meet ongoing trading costs and the agreed contributions. Directors usually remain in control, subject to their duties and the approved terms.

What happens if the company cannot keep up the payments?

The proposal must explain the consequences of failing to meet its commitments. Creditors may be able to pursue recovery and the company may face liquidation. Raise problems promptly with the supervisor.

What information is needed to assess a CVA?

Provide recent accounts, a cashflow forecast, a creditor list and details of any urgent enforcement or court action. The assessment should consider why the debt arose and the changes needed for a sustainable business.

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