When would my company consider using a Company Voluntary Arrangement with a Moratorium?

A CVA without a Moratorium does not freeze creditors actions in the period of 3 - 4 weeks up to the creditors meeting

A Company Voluntary Arrangement, without a moratorium is used if your business is not subject to an imminent threat (in the relatively short period leading up to the Company Voluntary Arrangement creditors meeting [CVA]) such as:

  • a winding up petition
  • or the threat of receivership
  • or the threat of distraint
  • or a walking possession arrangement
  • or repossession of goods by a financial company
  • or landlords distraint

If there are no threats of creditor action then it is possible that a Company Voluntary Arrangement (CVA) without a moratorium may be sufficient to achieve the rescue of your company as the extra protection of a freeze on creditors actions in the short period leading up to the creditors meeting is not needed.

Directors who want "safety first" may, however, wish to apply for a moratorium in any event to obtain the absolute protection of a freeze on creditors actions in the short period leading up to the creditors meeting. Alternatively your company could be placed in administration to achieve the same objective.

 

Chris Parkman
Chris Parkman
BSc Hons, FABRP, MIPA, FCCA, Insolvency Practitioner

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.

Call