Company Voluntary Arrangements (CVAs) - Law - CVA with a moratorium
Schedule A1 - Insolvency Act 1986 - Paragraph 4I - Public-private partnership projects
If a public- private partnership project becomes insolvent the general rule is that that business cannot apply for a Company Voluntary Arrangement (CVA) with a moratorium. Paragraph 4I of Schedule A1 to The Insolvency Act defines the phrase "public private partership project" for this purpose.
The actual wording of Paragraph 4I of Schedule A1 to The Insolvency Act 1986 is reproduced below in bold.
Paragraph 4I - Schedule A1 - Insolvency Act 1986 - Public-private partnership project
(1) In paragraph 4B “public-private partnership project” means a project—
(a) the resources for which are provided partly by one or more public bodies and partly by one or more private persons, or
(b) which is designed wholly or mainly for the purpose of assisting a public body to discharge a function.
(2) In sub-paragraph (1) “resources” includes—
(a) funds (including payment for the provision of services or facilities),
(c) professional skill,
(d) the grant of a concession or franchise, and
(e) any other commercial resource.
(3) In sub-paragraph (1) “public body” means—
(a) a body which exercises public functions,
(b) a body specified for the purposes of this paragraph by the Secretary of State, and
(c) a body within a class specified for the purposes of this paragraph by the Secretary of State.
(4) A specification under sub-paragraph (3) may be—
(a) general, or
(b) for the purpose of the application of paragraph 4B to a specified case.
The gist of this law (Paragraph 4H of Schedule A1) is that when public-private partnership projects designed to assist public bodies become insolvent then they are not permitted to propose a CVA with a moratorium. For free advice in plain English as to the other options open to your company please contact us.