Company Voluntary Arrangement (CVA)

A Voluntary Arrangement is an agreement between an insolvent or financially-challenged debtor organisation and its creditors; this is option is aimed at avoiding the liquidation of the company’s assets.

Under a voluntary arrangement the company continues to operate as normal and pays off its debts over an agreed upon period, without any court-issued administration orders.

Such agreements give the company breathing space and legal protection, which prevents creditors attacking it and from winding-up orders. This process allows a viable, but struggling, company to repay some, or all, of its historic debts out of future profits, over an agreed period of time. Such companies may require additional support to help with re-financing and in other areas to ensure that the business returns to profit and becomes a viable concern.

The benefit with this option is that directors stay in control of the company, with Hart Shaw providing support throughout the process.

The Voluntary Arrangement was incorporated into UK law in 1986 and is one of the government’s preferred rescue options.

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