Company Voluntary Arrangements - Duty to advertise commencement of CVA freeze on creditors
Schedule A1 - Insolvency Act 1986 - Paragraph 10 - Advertising requirement for a CVA with a moratorium
Under Paragraph 10 of Schedule A1 to the Insolvency Act 1986 it is a duty of the Nominee, once the moratorium is granted, to advertise the existence of the court ordered freeze on creditors' actions.
The actual wording of Paragraph 10 is reproduced below in bold.
(1) When a moratorium comes into force, the nominee shall in accordance with the rules -
a) advertise the fact forthwith, and
b) notify the registrar of companies, the company and any petitioning creditor of the company of whose claim he is aware of that fact.
(2) In sub-paragraph (1) (b), "petitioning creditor" means a creditor by whom a winding-up petition has been presented before the beginning of the moratorium , as long as the petition has not been dismissed or withdrawn.
(3) If the nominee without reasonable excuse fails to comply with sub-paragraph (1) (a) or (b), he is liable to a fine.
It is necessary to advertise the fact that a company is continuing to trade in a Company Voluntary Arrangement moratorium period ahead of the creditors' meeting so that "new" creditors are not incurred without having any knowledge of the company's financial difficulties.