Company Voluntary Arrangements & Petitioning Creditors - Benefit of stopping the winding up action
As soon as a new type (Section 1A of The Insolvency Act 1986) Company Voluntary Arrangement proposal is filed with the court a winding up petition already issued cannot be pursued - unless the CVA proposal is later rejected at the creditors meeting called to consider the proposal.
It can be seen, therefore, that the issue of a winding up petition may be the final push to encourage directors to seek a voluntary arrangement with their company creditors.
All is not lost as far as a possible company rescue is concerned when a winding up petition is issued against a company. A Company Voluntary Arrangement proposal under Section 1A of The Insolvency Act 1986 will stop the winding up proceedings. For further insolvency advice and to learn of the benefits of a Company Voluntary Arrangement please contact us.
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