Company Voluntary Arrangement (CVA)

What is a Company Voluntary Arrangement? (CVA)

A CVA can provide a lifeline to insolvent companies in financial difficulty. A CVA is particularly useful as it allows a mechanism to freeze and potentially reduce a company’s liabilities.

To be successfully implemented a CVA has to be approved by 75% of unsecured creditors by value. A high percentage of potential CVA's are approved as they will normally provide a more attractive return to creditors than would be achieved in Liquidation.

The advantage to management is that they remain in control of the Company with the intention of returning value to its shareholders. 

For more information about how a CVA works press here.