In essence, a Company Voluntary Arrangement (CVA) is a formal agreement between a company and its’ non-secured creditors to offer them a better outcome than they would receive if the company were forced into an alternative insolvency process, administration or more typically, liquidation.
It usually involves allowing a company to continue to trade following a period of restructuring in order to realise certain assets and/or pay profits into a CVA fund over time (up to five years). The CVA fund is then used to repay creditors in part or full.
Some of the key advantages of a CVA include:
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You can read more about how a successfull CVA can work in our Case Study