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.

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