On 11th June, the House of Commons Library published a briefing paper that provides a detailed overview of the Company Voluntary Arrangement (CVA) procedure.  A CVA enables a viable company in financial difficulty to enter into a legally binding agreement with its unsecured creditors in which the company’s debts are compromised. The company’s directors, an administrator or a liquidator may make a proposal for a CVA which is then put before a meeting of creditors and shareholders for their approval.  While an agreement is being pursued, the existing management stays in place.  It is described as a relatively simple procedure with minimum court involvement.  The paper also provides a summary of recent Government consultation papers and a report commissioned by R3 (the insolvency trade body) on the reasons for the limited success of CVA.

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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