Company Voluntary Arrangements (CVAs) - Law - CVA with a moratorium
Schedule A1 - Insolvency Act 1986 - Paragraph 39 - The law relating to Supervisors of Company Voluntary Arrangements
The Supervisor of a Company Voluntary Arrangement (CVA) and the extent of his powers
The powers of a Supervisor are generally set out in the body of the CVA proposal.
In addition by Paragraph 39 of Section A1 of The Insolvency Act 1986 provision is made for,
- The person to operate and manage the approved Company Voluntary Arrangement to be known as the "Supervisor", and
- The Supervisor to be given power to aply to the Court for directions on any matter on which he needs guidance, and
- Any creditors or others, dissatisfied by the Supervisor's actions, to be able to apply to the Court for directions
- The Court to be able to replace or substitute a person as Supervisor
- The Supervisor to have power to apply to Court for a winding up order or administration order against the company
The actual wordng of Paragraph 39 of Schedule A1 to The Insolvency Act 1986 concerning Supervisors of Company Voluntary Arrangements is reproduced below in bold.
Paragraph 39 - Schedule A1 - Insolvency Act 1986 - Supervisor's of Company Voluntary Arrangements
(1) This paragraph applies where a voluntary arrangement approved by one or both of the meetings summoned under paragraph 29 has taken effect.
(2) The person who is for the time being carrying out in relation to the voluntary arrangement the functions conferred—
(a) by virtue of the approval of the arrangement, on the nominee, or
(b) by virtue of paragraph 31(2), on a person other than the nominee,
shall be known as the supervisor of the voluntary arrangement.
(3) If any of the company’s creditors or any other person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court.
(4) On an application under sub-paragraph (3) the court may—
(a) confirm, reverse or modify any act or decision of the supervisor,
(b) give him directions, or
(c) make such other order as it thinks fit.
(5) The supervisor—
(a) may apply to the court for directions in relation to any particular matter arising under the voluntary arrangement, and
(b) is included among the persons who may apply to the court for the winding up of the company or for an administration order to be made in relation to it.
(6) The court may, whenever—
(a)it is expedient to appoint a person to carry out the functions of the supervisor, and
(b) it is inexpedient, difficult or impracticable for an appointment to be made without the assistance of the court,
make an order appointing a person who is qualified to act as an insolvency practitioner, or authorised to act as supervisor, in relation to the voluntary arrangement, either in substitution for the existing supervisor or to fill a vacancy.
(7) The power conferred by sub-paragraph (6) is exercisable so as to increase the number of persons exercising the functions of supervisor or, where there is more than one person exercising those functions, so as to replace one or more of those persons.
A Supervisor of a CVA has power to apply to Court for directions just as creditors are able to do the same when dissatisfied with the Supervisor's actions.