By 
The Company Voluntary Arrangement has been around for over twenty years and could be the solution for a company facing financial difficulties. A company voluntary arrangement, or CVA, is a contract between the insolvent company and its creditors to pay some or all of its debts out of future earnings. It is an answer for those companies that do not want to go completely bankrupt and a solution so that creditors receive at least part of the money owed to them.
A CVA is not simply about two parties agreeing to pay the money back. It goes much deeper than that. To begin the CVA process, one must believe that their business can come back and be profitable. This person should then contact a legal professional who can draft a CVA. In most cases these people go to the place of the company and find out what the problem may be. After reviewing the data and seeing the company firsthand, a CVA is drafted and changes are made. Managers and owners still remain in control of their business, but are being asked to make small changes that could turn the tide of the business. The CVA here is filed with the county court before it reaches the hands of the creditors. Before being approved, a 75% approval rate must be obtained for the CVA and a second voting process is in progress in the meantime. A second vote is being carried out where a 50% in favor of the company’s shareholders must be reached. After all this happens, a CVA springs into action.
A CVA is a long and grueling process, but it is the key to a number of insolvent businesses that have the potential to make the business profitable. Before considering a CVA, one must really assess whether or not this is the answer for them.