Company Voluntary Arrangments


A Company Voluntary Arrangement (CVA) is a formal agreement between a company and it’s creditors. A CVA is a way of satisfying creditors regarding repayment of the money owed over a set period.


The primary advantage of a CVA as a solution to insolvency is that, apart from being legally binding, the company will be able to continue trading as long as it complies with obligations under the CVA

Possible Disadvantages

The main potential disadvantage is that if the terms in the agreement are not followed, it becomes void and creditors are  able to take legal action against the company. A potential other disadvantage is that CVA’s can take some time to conclude and may be expensive. If negotiations prove fruitless in a  situation where a business looks like it may be insolvent but has a chance of survival, valuable time and resources may be wasted which could otherwise have been spent on seeking to get the business quickly back on track.

It can also be the case that a CVA might have to include a long term commitment from the company or possibly concessions by shareholders. In some situations, company owners may tale the view that a liquidation or administration and starting with a clean slate are preferable but it all depends on the circumstances.

The Process

The formalities for a CVA are reasonably straightforward and the process is largely governed by negotiations and putting forward a proposal which is as compelling as possible to creditors, ho of course will not be best pleased to accept an agreement which may see them only receive a small percentage of what they are owed and only over a period of time. From a creditor perspective agreeing to a CVA will be the lesser of 2 evils, between getting something or possibly getting less or even nothing.

The initial process is to make a proposal having fully assessed the situation, gathering information about assets, liabilities, projected future income and plans.

The CVA needs to be sent to the court, shareholders, and creditors. The creditors will vote on whether they are willing to accept the terms and, if more than 75% agree, all creditors are bound by it. It is possible to amend the terms in the CVA at a later date if the company feels they will be unable to meet them, but the same majority vote conditions will apply as before.

How can we advise you?

We are experts both in insolvency law and in negotiating a CVA, either on behalf of the debtor company or one or more of the creditors. Our fees are competitive when assessed against those that may be chargeable by Insolvency Practitioners. Please get in touch to confidentially discuss your requirements and circumstances.