Costs of preparing and operating under a Company Voluntary Arrangement

Cost of a CVA

What costs are involved in putting forward a new type of Company Voluntary Arangement (CVA)? [By new type we mean the type of CVA where a freeze on creditors actions is obtained for the period leading up to the creditors meeting - Otherwise known as a Section 1A Insolvency Act 1986 arrangement]

As there are many types of Company Voluntary Arrangement the costs incurred can vary materially. However, a well drawn Company Voluntary Arrangement proposal will define the sum of costs to be incurred within close parameters.

The costs and disbursements include:

Nominees Fees

  • Nominees fees will be greater in a new type Company Voluntary Arrangement  than in an old type CVA. The reason for this is that in a CVA with a moratorium the nominee has a responsibility to "monitor" in that moratorium period. The nominee's monitoring is in essence to ensure that the company has sufficient cash to operate in the moratorium period. In addition a nominee should "test check" that the directors are carrying out their duties.
    • of disclosure and
    • of not selling fixed assets.
    The nominee has the additional duty of reporting to the court whether or not, in his opinion, the company has (at the start of and during the course of the moratorium period) sufficient cash to operate until the date of the creditors meeting.

Nominees Disbursements

  • In a CVA with a moratorium the nominee has the duty (after the director's prime responsibility)  to ensure that the company's assets are not dissipated by the directors. In consequence a nominee has to take out "bordereau" cover. That cover is insurance cover. It is cover which provides creditors with a safety net, should the nominee improperly deal with company assets.


You should always be able to get a quote of a set fixed sum for a nominee to carry out his duties in connection with a Company Voluntary Arrangement. After a half day FREE review an insolvency practitioner should be able to quote either a fixed fee or a fixed basis of charging.

The amount of the nominee fees is in addition always addressed in the CVA proposal - and the creditors can vote at the creditors meeting to vary or reduce the level of those fees if they do not provide value.

For more on the insolvency costs incurred in a Company Voluntary Arrangement and to address all other insolvency related matters contact Purnells Insolvency Practitioners.

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