Company Voluntary Arrangements (CVAs) - Documents to be filed in court to obtain a CVA with a moratorium

Schedule A1 - Insolvency Act 1986 - Paragraph 7 - Documents to be submitted to court

 

 

 

When a Company Voluntary Arrangement (CVA) is proposed a judge ultimately decides whether or not the company concerned is to be granted a freeze on creditors enforcement acions (otherwise known as a moratorium or ring fenced period) . The judge must have submitted to him for consideration the various documents listed in Paragraph 7 of Schedule A1 to The Insolvency Act 1986 to enable him to make that decision. 

 

 

The actual wording of Paragraph 7 of Schedule A1 to The Insolvency Act 1986 is reproduced below in bold.

 

 

Insolvency Act 1986 - Schedule A1 - Paragraph 7 - Documents to be submitted to court

 

(1) To obtain a moratorium the directors of a company must file (in Scotland, lodge) with the court—

(a) a document setting out the terms of the proposed voluntary arrangement,

(b) a statement of the company’s affairs containing—

(i) such particulars of its creditors and of its debts and other liabilities and of its assets as may be prescribed, and

(ii) such other information as may be prescribed,

(c) a statement that the company is eligible for a moratorium,

(d) a statement from the nominee that he has given his consent to act, and

(e) a statement from the nominee that, in his opinion—

(i) the proposed voluntary arrangement has a reasonable prospect of being approved and implemented,

(ii) the company is likely to have sufficient funds available to it during the proposed moratorium to enable it to carry on its business, and

(iii) meetings of the company and its creditors should be summoned to consider the proposed voluntary arrangement.

(2) Each of the statements mentioned in sub-paragraph (1)(b) to (e), except so far as it contains the particulars referred to in paragraph (b)(i), must be in the prescribed form.

(3)The reference in sub-paragraph (1)(e)(ii) to the company’s business is to that business as the company proposes to carry it on during the moratorium.

(4)The Secretary of State may by regulations modify the requirements of this paragraph as to the documents required to be filed (in Scotland, lodged) with the court in order to obtain a moratorium.

 

 

For free advice on any insolvency matter please contact us. We will assist you in plain English & provide options (including pros & cons) particularised to the actual circumstances of your company.

 

From Paragraph 7 above it is apparent that the documentation that must be lodged with the court is extensive. That is necessary as the judge will only be able to assess whether or not to grant a freeze on creditors ahead of a CVA creditors meeting if he has comprehensive information to consider. Paragraph 7 of Schedule A1 to The Insolvency Act 1986 specifically defines what information must be given to the court.