www.company-debt.co.uk

[Tom Sheppy]

Hi there. I am considering a CVA for my company. How do I go about setting this type of agreement up? What influence do the creditors have? Any advice would be very welcome.

[Graham Wilson]

Hi Tom and welcome to the forum

You will need to work with a corporate debt management company and Insolvency Practitioner to implement a company voluntary arrangement. The first job is to understand the current position of the business and what it can afford to pay its creditors. A proposal is then drafted and issued to the creditors for them to consider.

The creditors have the power to accept or reject the proposal. It requires 75% of the value of the creditors who vote agree, to accept the agreement and make it legally binding on them all.

[Derek Cooper]

Hi there Tom

As Graham says, the creditors ultimately make the decision as to whether a company voluntary arrangement (CVA) will be accepted or rejected. As such, it is very important to know that the major creditors will be on side.

Normally, the insolvency practitioner will speak to major creditors such as the bank about the possibility of them accepting a CVA before presenting the proposal to them. In this way, the reasons behind it can be explained and concerns addressed so that a proposal can be drafted which will be accepted.