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CVA's
If you are not familiar with a CVA, you may still have heard of an IVA, which applies to an individual. A Company Voluntary Arrangement is a legally binding agreement between a troubled company and its creditors that seeks to repay as much debt as realistically possible while allowing a company to remain operational and without requiring a change in ownership, management or work-force.
A CVA or Company Voluntary Agreement is a process enabling a company to come to an agreements with its creditor(s) regarding how its remaining debt(s) are to be repaid. The amount repaid by the CVA, whether it will be a full or partial payment, is dependent on what the troubled company can be reasonably expected to pay.
If a reasonable and viable proposal is made, creditors will support a CVA when usually the only other option is liquidation, which would see a creditor getting little to no return on its owed monies.
A CVA proposal can only be put forward by a company if it is insolvent or contingently insolvent. It requires the approval of 75% of voting creditors affected by the proposal. If the proposal is effective then the CVA binds all creditors to the agreement regardless of their vote, while allowing the company directors to retain control of the company.
In this way a CVA seeks to allow the company to continue trading, to avoid lay-offs and continue to generate income, while also attempting to serve the interests of the creditors and see their monies returned as fully as possible.
75% of businesses that close, do so because of lack of cash flow not because of profitability. Otherwise healthy companies can experience crushing cash flow problems that make it seem like the end of the world. And it doesn't get any easier to manage when every day begins and ends with creditors calling for overdue payments.
Leases signed in better times may now be far too expensive, as some supplier contracts and even compensation agreements probably are. The difficulty is in knowing how to get out from under these onerous debts without killing the company.
The frustration mounts when the owners and company management know beyond a shadow of a doubt that their company can survive and thrive if they only had just a bit of short term relief and for many caught in this day-to-day fight staying focused on the real work of making the company viable just adds to the frustration.
It's a vicious cycle that can become terminal if left untreated but there is good news. You can get out from between the rock and the hard place and gain the upper hand once again. All you need is the right team with the right medicine and your company can and will be cured.
Insolvency Network has been advising clients of all sizes and organising Company Voluntary Arrangements for 7 years now and we have NEVER failed to deliver exactly the right solution. We are that good and we're ready to serve you!
You may be wondering how we have achieved such a perfect record and the answer is really quite simple. We are a team of highly qualified financial advisors that work exclusively for our clients.
We have just one goal when we take on a new client and that is to serve that client to the very best of our ability and with an exclusive focus on getting the job done. We are not beholden to anyone but you. We know how to relieve the pressure and when we've done our job you will be back on the road to success without having to worry about the next call of the next late payment notice. We will make them disappear.
Cash flow problems are like a cancer that will kill the patient if left untreated. Don't let that happen to you.
Call us today for a 100% free consultation and let's see if we can't deliver the cure. There is no obligation on your part and the results we can deliver will astound you. Call now before the next creditor comes knocking at your door.
