0800 313 4331 consult@interco.com

Company Voluntary
Arrangement

CVA

CVAInsolvency Solutions CVA

Company Voluntary Arrangement

 

TO DO?…OR NOT TO DO?

“CVA offers a positive alternative to Liquidation, one that lets a Company bypass most of its debts and continue to trade successfully”
Is it true in your case?; will it work better than asking us to legally transfer your business to a Fresh Start Company.
How does a CVA work? What’s for doing it ? What’s against? How do you do it?

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HOW A CVA WORKS

The Director proposes a reduced sum settlement with creditors to cover all past liabilities, which has to be accepted by at least 75% of the creditors (by value) who reply and vote.

TO DO?..OR NOT TO DO?

“CVA offers a positive alternative to Liquidation, one that lets a Company bypass most of its debts and continue to trade successfully”

Is that true in your case?; will it work better than asking us to legally transfer your business to a Fresh Start Company.

How does a CVA work? What’s for doing it? What’s against? How do you do it?

HOW A CVA WORKS

The Director proposes a reduced sum settlement with creditors to cover all past liabilities, which has to be accepted by at least 75% of the creditors (by value) who reply and vote.

Arrangement Terms and Fees

WHAT % OF DEBTS IS PAID?
This is not fixed, but negotiable. It can be different for different classes of Creditor – Staff (100%) – HMRC – Landlord – Trade. Clearly the overall commitment must be one which the forward business forecast shows to be achievable from post-tax profits.

A LUMP SUM SETTLEMENT
Will normally offer Creditors monies not otherwise available to them. This may be a voluntary payment from a third-party on the company’s behalf (the Directors themselves? Friends? a partnering commercial enterprise?). Or it might be a pledge of funds that will only fall due to the company at a future date if it continues to trade.

AN EXTENDED PAYMENT PROPOSAL
Will be supported by an accurate current balance sheet and recent trading performance history and a forward business forecast covering the period over which the Company says it will make payments to its Creditors from operating profits.

A WHAT FEES ARE PAYABLE?
This is not fixed, but negotiable. It can be different for different classes of Creditor – Staff (100%) – HMRC – Landlord – Trade. Clearly the overall commitment must be one which the forward business forecast shows to be achievable from post-tax profits.

TO DO? – CVA UPSIDES?

TO DO?
CVA UPSIDES?

Five upsides to a CVA rather than a Fresh Start Company
  • minimised disruption – customers need not notice the change;
  • termination of premises or equipment leases can often be avoided
  • requires no report to the insolvency service on Director conduct
  • easier to gain continuance with key suppliers who are bound in
  • after CVA is completed credit agencies can show CVA debts settled

NOT TO DO? – CVA DOWNSIDES?

NOT TO DO?
CVA DOWNSIDES?

Five downsides to a CVA, rather than a Fresh Start Company.
  • hard to make enough post-tax profit to meet CVA payments
  • company will be trading with a negative CVA credit profile
  • CVA conditions restrict Director’s freedom including to borrow
  • staff arrears not met by government – paid as creditors
  • creating proposal is difficult and may not be accepted

HOW TO DO? – WE  MANAGE THE WHOLE CVA TASK

HOW TO DO?
WE MANAGE THE WHOLE CVA TASK

  • Assess Current Financial Position and Discuss Futures
  • Advise on a Viable Shape of CVA for your Company
  • Defend Short Term against any pressing Creditors(s)
  • Help you create The CVA Proposal and Financial Forecasts
  • Assist as needed to Negotiate Acceptance by Creditors

CVA? OR A FRESH START COMPANY?

Give me a call to discuss what’s best for You

Freephone : 0800 313 4331 – Chichester : 01243 624716 – Bromley : 0208 468 1033 or

 

Michael O’Connor M.A Managing Consultant

CVA? OR A FRESH START COMPANY?

Give me a call to discuss what’s best for You

Chichester :01243 624716
Bromley :0208 468 1033
or

 

Michael O’Connor
M.A Managing Consultant

Interco Management Services Limited

Forum House – Stirling Rd – Chichester – PO19 7DN – 01243 624716

1 Bromley Lane – Chislehurst – Bromley – BR7 6LH – 0208 468 1033

Interco Management Services Ltd

Forum House : Chichester : PO197DN : 01243 624716

1 Bromley Lane : Bromley : BR76LH : 0208 468 1033