The Company Voluntary Arrangement (CVA)
Often a company with a healthy business can find itself with cash flow problems and creditor pressure due to a one off event, and facing insolvency as a result. Thus could be the insolvency of a major customer or a contract going badly wrong. A Company Voluntary Arrangement (CVA) is an insolvency procedure whereby a company can continue to trade even though it is insolvent.
A Company Voluntary Arrangement is Used if an Insolvent Company Can Return to Profitability
A CVA is used if the company has already or is likely to return to profitability in the near future and the debts can be paid off over an extended period of time. The CVA is a tailored plan to repay to creditors, usually over a 3 year period, what the company can afford to pay. Typically, this is between 25 to 60% of the total debt.
Click Here for our guide to the Company Voluntary Arrangement process (which includes the main advantages of using a CVA), and Click here for Frequently Asked Questions. There are rumblings for reform of CVAs – click here to see an article about this debate.
We Have Run Over 50 Successful Company Voluntary Arrangements.
Our team of Insolvency Practitioners, in London, Essex, Salisbury and the Cotswolds have used Company Voluntary Arrangements to help over 50 companies that have encountered short term difficulties. In c.70% of cases the CVA allowed them to return to profitability and trade successfully, or is still on-going.
Need Help with Insolvency, Recovery or Turnaround?
If you or your business is facing insolvency, the sooner you contact us, the more we can help.
Click here to see some testimonials and case studies. Here are two short testimonials to give you a flavour of the results a CVA can bring:
Testimonial from Ryan Leisure Limited
“By using a Company Voluntary Arrangement, Antony Batty & Co helped to take the financial pressure off our business, providing us with the time and support to get our business back on track. Our suppliers and other creditors were kept well informed throughout the process and appreciate that they have got more money back than if we had put the business into Administration.
Since completing the CVA, our business has gone from strength to strength, out-performing the economic downturn and our industry competitors.”
Director of Ryan Leisure Ltd
Testimonial from Simon Harrison Limited
“Managing a small and growing company through a cash crisis is very stressful. Antony Batty & Company’s calm expertise and advice in putting our CVA together was crucial to our recovery, as is their continue support. The CVA has helped return our business to profit and stability, which benefits everyone involved.”
Simon Harrison Ltd
A Company Voluntary Arrangement Can Give a Business Breathing Space to Recover
A Company Voluntary Arrangement is a contract between a company and its creditors that is legally binding on all concerned. If approached in a proper manner it can give an insolvent business breathing space to recover its financial footing. A CVA offers a very flexible approach to an insolvent situation and, therefore, can be tailor made to your company’s needs.
Click this link: Company Voluntary Agreement Flowchart to see a Flowchart of the stages involved in a Company Voluntary Agreement.
We believe a company voluntary arrangement provides an excellent opportunity for an insolvent company to survive and for creditors to recover far more of their debt than they would in a liquidation.
Over the years we have built strong contacts with a number of funders who are willing to inject working capital into a business once its old debts have been ring fenced in a CVA.
Contact us for More Information on a Company Voluntary Arrangement
If you believe your company, or one of your clients, would benefit from a Company Voluntary Arrangement, contact us or call us on 0207 831 1234 for a FREE initial discussion.