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What is a Company Voluntary Arrangement (CVA)?

Posted: 07 Sep, 2018

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Mike Smith of Company Debt explains how the company voluntary arrangement procedure works, and how it can help distressed companies return to profitability.

A Company Voluntary Arrangement is a statutory agreement between an insolvent limited company and its creditors. The arrangement is legally binding and allows the insolvent company to repay a proportion of its debts over a period of 1 to 5 years. For the proposal to be approved, at least 75% of the creditors (by value of debt) need to agree to the proposal’s terms. Company Voluntary Arrangements have been a part of UK law since 1986 and is one of the Governments’ preferred rescue options for companies.

 


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