Company Voluntary Arrangements (CVAs) - Law - CVA with a moratorium
Sch A1 - Insolvency Act 1986 - Paragraph 4G - Companies Ineligible for a CVA with a moratorium - Definition of "Debts"
When law is written it becomes necessary to define the words and phrases used in an attempt to produce greater clarity. Paragraph 4G of Schedule A1 to The Insolvency Act 1986 defines the word "Debt" for the purposes of determining whether or not a particular company involved in Capital Market Arrangements is eligibe to apply for a Company Voluntary Arrangement (CVA) with a moratorium.
The actual wording of Paragraph 4G of Schedule A1 to The Insolvency Act 986 is reproduced below in bold.
Paragraph 4G - Schedule A1 - Insolvency Act 1986 - The meaning of "Debt"
The debt of at least £10 million referred to in paragraph 4A—
(a) may be incurred at any time during the life of the capital market arrangement, and
(b) may be expressed wholly or partly in a foreign currency (in which case the sterling equivalent shall be calculated as at the time when the arrangement is entered into).
Certain types of financial companies cannot, by law. apply for a CVA with a moratorium. Paragraph 4G of Schedule A1 to The Insolvency Act 1986 defines when a debt is a debt or not a debt for determining whether a particular company can apply for a CVA with a moratorium. The law relating to financial companies when they are insolvent is complex and is full of cross references to other statutes. For plain english free advice please contact us.