Purnells

	Two types of CVA
	what are the two types? why two types? who can apply for a new type of CVA? are their different rules? when would an old type CVA be used? when would a new type of CVA be used?
	Old type CVA - No Moratorium the limbo period nominees duties disclosure issues directors duties the proposal impact of proposal on various parties
	New type CVA - With Moratorium enormous power enormous responsibility disclosure issues impact of proposal nominees duties creditors meeting voting rights supervisors duties a typical proposal costs concluding the CVA banks and debenture holders landlords petitioning creditors preferential creditors unsecured creditors
	Table of differences table to show the differences between the two types of CVA?
	Administration Order v CVA when would administration be sought rather than take up a new type CVA?
	Case Studies case study 1 case study 2 case study 3

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Company Voluntary Arrangements (CVA)

When a company cannot meet its debts when they fall due, a CVA may be the best option available to that company.

The purpose of a CVA is to make a 'deal' with the creditors to avoid them taking any further action against the company which would result in a liquidation.

A proposal is drawn up by the directors with the help of an insolvency practitioner and forwarded to all creditors.

The law sets out a minimum level of information that must be contained in the proposal.

The index on the left hand side of this page shows that there are two distinct types of CVA

The first type of CVA on this site we call an "old CVA", was introduced into law by the Insolvency Act 1986 - and this type of CVA will continue into the future alongside the "new CVA".
The second type of CVA gives directors powerful options when their company is under stress. This type of CVA was introduced into law by the Insolvency Act 2000. - but only becamse available to be used as and from the 1st January 2003. This new type of CVA gives the company the benefit of a "moratorium" during which time the creditors cannot take enforcement action against the company. This breathing space period allows the directors time to formulate a way forward which will hopefully provide a better result for the creditors, employee's and stakeholders.