About CVAs

Company Voluntary Arrangements (CVAs) were introduced as a method to help struggling businesses restructure their finances in 1986 through the Insolvency Act.

Since then many companies have taken advantage of this solution - over 2,800 in the last 5 years.

A CVA requires a Nominee prior to approval and a Supervisor to manage the CVA once approved. The Nominee and Supervisor must be Licensed Insolvency Practitioners.

What is a CVA?

A CVA is an agreement between a company and its creditors to repay all or a proportion of the debt. This repayment is normally through an agreed monthly payment and a share of the company’s profits although this is entirely flexible - it could include a lump sum full and final settlement or a debt for equity swap.

A CVA is a contract between the parties concerned and once approved its contents legally binds all creditors (as long as they don’t hold any security).

Once approved creditors are prevented from taking further action against it – i.e. all legal proceedings such as winding up petitions, bailiff action and CCJs can no longer proceed.