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CVA
A Company Voluntary Arrangement consists of a deal between the company and its creditors to repay them from future profits and is a deal based on preserving the company, rebuilding sales and profits and paying something back over a period of time to be agreed. The company directors remain in control and personal guarantees do not get called in. A well-structured Arrangement can do much to ensure that the business has a good chance of survival.
A successful CVA is based on:
- A commercially structured deal
- Appropriate levels of working capital in addition to debt restructuring
- A determination to make the company Arrangement work
Directors must understand that the creditors' objectives are paramount when putting together the Arrangement.
If the business has a viable future, there is an acceptance of the need for change, the directors are prepared to fight for survival and appropriate funding can be found, then an Arrangement is an exceptional tool.
An Arrangement can be proposed by the directors of the company but, when a company is in liquidation or administration, then the liquidator or administrator can propose the Arrangement. However, it can only be proposed if the company is insolvent.
To discuss Company Voluntary Arrangements call Philip Wood or Lucy Hill on 0845 050 4444 or at one of our local offices or email insol@bcr-insolvency.co.uk
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BCR offer insolvency services throughout Staffordshire, Shropshire, Cheshire and Lancashire with insolvency practitioners helping individuals and companies in Stoke on Trent, Shrewsbury, Telford, Bolton, Preston, Blackburn, Stockport and Manchester.