Company Voluntary Arrangement

• A Company Voluntary Arrangement (CVA) is a formal arrangement between an insolvent company and its creditors for time to pay.
• If an insolvent company has a viable future, a CVA can be an effective procedure to avoid a liquidation and to pay creditors an affordable sum out of future profit for an agreed period.
• The deferred payments may not discharge creditors’ claims in full, but upon completion of the approved Proposal the balance of the remaining debts are written off.
• A CVA is administered within the Insolvency Act and Insolvency Rules. Consequently, the directors require the expertise of a regulated insolvency practitioner.

         What MGA does to help

• MGA has been helping directors to launch CVAs since their introduction in the 1986 Insolvency Act.
• Drawing on this experience, MGA will ensure the directors prepare a carefully structured and thoughtful Proposal to save jobs and repay creditors more than they could expect in a liquidation.
• MGA will help directors to consult key creditors and other stakeholders to win support for the initial conceptual proposal of a CVA.
• MGA will support the directors to prepare a detailed Proposal for all creditors to consider at a formal meeting.

         Fundamental components of a successful CVA include but are not limited to:

• A viable business that can return to profitability.
• Management accepting that change is necessary.
• Astute financial forecasting.
• Introduction of new working capital.
• A sustainable repayment plan to creditors over a realistic period.

MGA will guide directors to attain a viable CVA .