What is a Company Voluntary Arrangement? What Benefits do they Bring?
John Baalham talks about Company Voluntary Arrangements in this video
Company Voluntary Arrangements are an insolvency procedure that have seen a huge rise in the last 12 months due to the recent economic uncertainty we have seen. First, we had months of negotiations with our European partners in the protracted Brexit talks and now with the larger global issue of the Coronavirus pandemic which has hit UK businesses hard.
John believes that the:
“CVA procedure has not been used enough in recent times. It is a great insolvency tool at an Insolvency Practitioner’s disposal, in the right circumstances, and here at Antony Batty & Company, we have been using this procedure to great effect and have successfully restructured and saved hundreds of businesses in financial distress, often with the threat of a winding up petition weeks away – sometimes only days.” Click here to see some of our testimonials.
In the video, John looks at:
- What a CVA is and how it works: click here for some FAQs
- What the benefits of a CVA are – and points out they are not just for High Street Retailers
Company Voluntary Arrangements – A Possible Solution for Businesses in Financial Stress due to Covid-19 Disruption
We believe that the Company Voluntary Arrangement is a key component in our armoury, as Insolvency Practitioners, for businesses facing financial distress as a result of the Coronavirus pandemic
CVAs could enable distressed Companies to survive, by effectively “mothballing” them until better times return. Click here for our quick guide to CVAs.
Building on John’s video, the two key points are:
- Suppliers and employees will be bound by the CVA, but will get the best prospect of recovering their losses if the Company still exists and can be quickly kick-started once business returns.
- The CVA would seek to repay creditors and employees out of future profits, in the meantime employees can claim arrears of pay, redundancy and other benefits from the Government which will remove the short-term burden on the Company.
These are unprecedented times for businesses and people everywhere.