Company Voluntary Arrangements (CVA's)

CVA's are arrangements whereby a company in financial difficulty puts forward a proposal to its creditors in which it seeks to agree paying a dividend to its creditors over an agreed period of time, which will ultimately yield a better outcome to creditors than would have been the case were the company to have been wound up.

Creditors are often under pressure themselves, and may not have the luxury of or patience to wait for a lengthy period to be paid a few pence in the pound. Often this would result in individual creditors taking their own action against the company depriving other creditors of any prospect of recovery. CVA's were generally proposed under the protection of administration orders, a costly exercise for a smaller business.

The Insolvency Act 2000 recognised the difficulties for smaller businesses and introduced moratoria, for companies meeting certain parameters to qualify as smaller companies, without the need of an administration order.

We regularly advise insolvency practitioners and companies on all aspects of CVA's.

For more information contact Tim Francis on 0845 402 5466 or email us at info@franciswilksandjones.co.uk