Corporate Recovery and Insolvency terminology

Company Voluntary Arrangements (“CVA”)

A CVA is a binding arrangement between a company and its creditors whereby a company generally agrees to pay creditors X p in the pound over a period of time. It is a tax-free way of reducing a company’s burden of debt and saving the business. It is possible for a “small” company to obtain the protection of a moratorium from creditors’ claims whilst a CVA is being proposed. Other companies need to first go through an Administration if a moratorium is required.

If the creditors accept the CVA, an Insolvency Practitioner will be appointed to supervise it.

For Carter Backer Winters’ interactive guide to Company Voluntary Arrangements please click here.

For an easy to use interactive ready reckoner to calculate the effect a Company Voluntary Arrangement might have on your balance sheet please click here.