Table of Differences Between the Two Legal Types of Company Voluntary Arrangement (CVA)

Go for a freeze (moratorium) on creditors actions or not?

Topic CVA No Moratorium CVA with a Moratorium
1. Fact of existence of proposal must be advertised No Yes
2. Any size of company can apply Yes No
3. Nominee must report as to sufficiency of cash in the moratorium period No (but best practice would be to report) Yes
4. In the moratorium period    
4.1 A winding up petition can be presented Yes No
4.2 A winding up order can be made Yes No
4.3 Landlord can take possession Yes No
4.4 Landlord can take a distraint Yes No
4.8 H.P Company can re-possess goods Yes No
4.9 Bank can appoint a receiver Yes No
4.10 Suppliers of public utilities may require payment of old debts as a condition of continuing to supply Yes No
4.11 The company cannot take credit of more than £250 (without advising the supplier No Yes
4.12 CVA must be advertised No Yes
4.13 Fact of moratorium must be displayed on letterheads etc N/A Yes

5. Creditors not notified of the CVA creditors will still be bound (post 1-1-2003)

 Yes Yes

From the above table it is apparent that a CVA with a moratorium is subject to many more regulatory requirements relating to disclosure

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