A Company Voluntray Arrangement (CVA) is proposed by the directors to both the members and creditors of the company. The CVA is usually a mechanism to allow time for a restructuring or reorganisation plan to be carried out, ultimately resulting in a return to profitability and the payment of a reduced or deferred dividend to creditors.
All creditors are legally bound by the Arrangement whether they take part in the process or not.
This is useful for companies with dissenting creditors;
The intention is that the restructured company will be able to continue to trade successfully but this does not apply in all cases.
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