A CVA IS A COMPANY VOLUNTARY ARRANGEMENT

The CVA is probably the most widely used and effective company rescue procedure and we have considerable experience in this area.

Expressed simply, the directors formulate a plan to return a failing company to viability, which involves the creditors accepting a reduced payment of their debt in return for the company making payments over an agreed period of time into the arrangement fund, which is then used to pay dividends to the creditors. Click here to see a simple example.

What do you need to secure a CVA?

• A potentially viable company
• Management who recognise the problems and how to resolve them, given time
  
• Adequate working capital available to support continuing trading
  
• A sensible proposal which is fair to all involved (directors, shareholders, creditors, banks, employees and the Government Departments) and gives everyone an incentive to see it succeed

In practical terms what will happen is that:

• You contact us with details of the company's problems
  
• We work with you and your advisors to assess the situation and to find out if, on the face of it, a scheme can be devised which satisfies the criteria needed for a CVA. These are:
  • Can the company be made viable?
  • If so, what exactly is required to bring this about?
  • What arrangements need to be made with creditors to enable the scheme to succeed?
    
  • Are those arrangements likely to be possible?

We make no charge for getting to this point but if the answers to the above questions are favourable then we will agree with you a fee for getting to work on the Proposal document itself. No matter how simple the scheme the Proposal is always a long and complicated document with a very high degree of technical input. Click here to see the mandatory contents required by the Insolvency Act 1986

We place great store in producing a clear and precise document, lucidly expressed and helpful to the layman. Do not forget, however, that many of your creditors will be assisted by professionals such as solicitors and some, such as HMIT and Customs and Excise have their own expertise, together with a great deal of experience. The Proposal must therefore show a high degree of professionalism, if it is to pass this scrutiny and make it possible to achieve a company rescue.

A significant part of the Proposal document will concentrate on showing why the CVA is a better choice than liquidation. (Click above to see the outline of a typical proposal)

HOW LONG DOES IT TAKE?

We would expect to be able to decide if a CVA is possible during the first meeting.

After that timing is really a matter of how quickly you and your advisors can get the appropriate information to us. The main documents that consume time in preparation are profit and cash flow forecasts for the term of the CVA. THESE ARE ESSENTIAL. Whilst these are usually prepared in-house by the company we can help you to express the figures and advise on the format. If your normal accountants are involved in this exercise we recommend that they should continue.

Once we have all the information it will take two or three days to put the document into final form for submission to court. At the same time the creditors (and shareholders) are given 14 days notice of the meetings to approve the proposals. Click here to see a typical time line for a CVA