Table of Differences Between the Two Legal Types of Company Voluntary Arrangement (CVA)

Go for a freeze (moratorium) on creditors actions or not?

Topic   CVA No Moratorium   CVA with a Moratorium
         
1. Fact of existence of proposal must be advertised   No   Yes
         
2. Any size of company can apply   Yes   No
         
3. Nominee must report as to sufficiency of cash in the moratorium period   No (but best practice would be to report)   Yes
         
4. In the moratorium period        
4.1 A winding up petition can be presented   Yes   No
         
4.2 A winding up order can be made   Yes   No
         
4.3 Landlord can take possession   Yes   No
         
4.4 Landlord can take a distraint   Yes   No
         
4.8 H.P Company can re-possess goods   Yes   No
         
4.9 Bank can appoint a receiver   Yes   No
         
4.10 Suppliers of public utilities may require payment of old debts as a condition of continuing to supply   Yes   No
         
4.11 The company cannot take credit of more than £250 (without advising the supplier   No   Yes
         
4.12 CVA must be advertised   No   Yes
         
4.13 Fact of moratorium must be displayed on letterheads etc   N/A   Yes
         

5. Creditors not notified of the CVA creditors will still be bound (post 1-1-2003)

  Yes   Yes

 

From the above table it is apparent that the new type of CVA that creates a freezing period (known as a moratorium) is subject to me regulatory requirements relating to disclosure.

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