Voluntary arrangements

A company voluntary arrangement (CVA) is a means whereby a company can reach a deal with its preferential and unsecured creditors to vary the timing and/or the amounts due to them, which is binding on all these creditors as long as the majority agree.

CVAs can often be used following an administration to gain the protection and powers of that procedure. Where a CVA is used on its own, the role of the insolvency practitioner is much reduced with the resulting benefit on costs and profile.

Voluntary arrangements are:

• Intended to encourage creative, flexible and practical ways to avoid winding up
• They are based upon the close involvement of creditors and carrying their trust
• They allow a period of protection to implement real business improvements