CONTENTS OF A CVA PROPOSAL
The
proposal document is very important; it tells your creditors:
-
what
the problems are
- how
you propose to resolve them
- what
it is you want them to agree to
It
should, therefore, be a persuasive and professional looking document.
Typically, a proposal will be constructed under the following headings
1) Introduction
2)
History of the company including structure and key personnel/statutory
information
3)
Reasons for the problem and how they have been/are to be resolved
4)
Specific proposal terms:
- Contributions
- based on projection/cash flow forecasts
- Profit
ratchet
- Assets/guarantees
included /charged assets
- Any
creditors specifically - secured? Contingent?
- Any
new finance, investment, asset movements
5)
Comparison of dividends
- Referring
to Statement of Affairs appendix
- Comparison
of outcome appendix
6)
Formal/procedural matters
- Nominee
- remuneration
- Supervisor
- remuneration
- Creditors
committee
- Legal
advices/valuers
- Statutory
offences
7)
Specific matters
- Details
of non - payment
- Details
of any winding up petition
- No
management information
- Evidence
from creditors of new debt
8)
Standard conditions - this is a section containing a large range of conditions
to apply to the CVA mostly of a technical and administrative nature
9)
Conclusion
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