Nominees Duties in the older type of Company Voluntary Arrangement
A "Nominee" is the person named in a Company Voluntary Arrangement (CVA) proposal who is intended to ultimately supervise the implementation of the proposal when the proposal has been agreed by the creditors of the company.
The "nominee" has to be a licenced insolvency practitioner in the older type CVA - the one where no freeze on creditors actions is obtained in the short period leading up to the date of the creditors meeting.
The "nominee" becomes the "supervisor" when the creditors approve the Company Voluntary Arrangement (CVA) proposal.
The nominee's duties in the older type CVA are not as great as his duties in the newer of CVA. (where a moratorium, or freeze, on creditors actions is enforced in the period leading up to the creditors meeting_
In the older type of CVA the duties of the Nominee include:
- Reporting to the court as to whether or not the nominee believes a creditors meeting ought to be called. In other words the nominee has to report whether or not, in his opnion, the proposed CVA has a good chance of sucess and also may be acceptable to the creditors.
- After reporting to the court the nominee has to:
- send out the notifications of the meetings to the shareholders and creditors.
- attend at the meeting and act as chairman of the meeting.
- report the result of the meeting to the court, creditors etc.
Generally speaking, the Nominee, in the older type of CVA does not have the responsibility of monitoring the progress and cash requirements of the company in the period up to the day of the creditors meeting. The Nominees' role is, therefore, "hands off" and the directors continue in full power up to the day of the creditors meeting.
In practical terms a Nominee helps company directors keep their company creditors off their back in the period leading up to the creditors meeting.
Should your company need the help and protection that a Company Voluntary Arrangement (CVA) proposal provides please contact us for FREE INITIAL ADVICE.
Would you like us to give you a call?
Fill in the form and we'll give you a call as soon as we can to discuss your needs in a free initial consultation with a Licensed Insolvency Practitioner. Alternatively give us a call on 01326 340579 if there is an urgency to your needs.
The information provided will be used solely to contact you and any information you provide will be held in accordance with our firm's privacy policy, and not used for marketing purposes.
