Impact of different types of Company Voluntary Arrangement Proposal
Can creditors take enforcement action ahead of the creditors meeting?
The law as regards rights of crditors is different depending upon whether a Section 1 or a Section 1A Insolvency Act 1986 Company Voluntary Arrangement proposal has been put forward.
If the older type of Company Voluntary Arrangement (The Section 1 type) has been put forward then prior to the creditors meeting at which the proposal is to be considered the fact that an old type CVA proposal is in existence has no impact on creditors rights.
- creditors can still issue court claims
- enforcement action can be taken (bailiffs, sheriffs, garnishee orders, charging orders)
- receivers can be appointed
- finance companies can re-possess their goods
- a winding up petition can be issued
- a winding up order can be made.
If there is a danger of any of the above events occurring in the limbo period leading up to the day of the creditors meeting directors might be sometimes better advised to propose a new type Company Voluntary Arrangememt proposal under Section 1A of The Insolvency Act 986
Purnells Insolvency Practitioners can advise you of the pros and cons of different insolvency options so that you can choose the best and most appropriate way forward. Contact us for a FREE INITIAL MEETING.
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