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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The government aim is for there to be a greater 'rescue culture' in the UK.

In line with this thinking the government is less happy with any one creditor bringing the life of a company to an end when the creditors as a whole have not been given an opportunity to consider if there is a better way forward.

The concept of a CVA was brought into existence in 1986 through the enactment of the Insolvency Act 1986. Over the last few years the number of CVA's have been:

1999		475
2000		557
2001		597

The 1986 type CVA has 'saved' many companies from liquidation. But the 1986 type CVA did not permit the breathing space a moratorium could have provided.

As can be imagined if a company:

has had a winding up order aimed against it.
or there are indication that the bankers may appoint a receiver.
or there has been a walking possession agreement or other distraint process.
or finance companies have indicated that they intend to take back their goods.

The need for the "breathing space" that a moratorium will provide became self evident.

The government reacted by enacting the Insolvency Act 2000. The sections in that Act relating to the "CVA's and a moratorium" became law on the 1st January 2003.