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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Before you can understand the main difference between the two types of CVA you need to appreciate the meaning of the word "moratorium" as it applies (or doesn't apply) to CVA's.

A "moratorium period" is a temporary period in which creditors cannot take enforcement action.

This temporary period of respite allows the directors to put a rescue deal to the company creditors.

The old type CVA introduced by the Insolvency Act 1986 is still available for use but does'nt have the benefit of a moratorium period. In many circumstances a moratorium may not be needed.

However, if a company is under severe pressure (say, subject to a winding up petition or with the threatened appointment of an administrative receiver by the company bankers) the directors can apply (from 1-1-2003) for a new type of CVA which provides a breathing space period.