Brown Turner Ross

CVA’s

Is this the situation you are facing?

• you have a great business that you have worked hard to develop
• cash flow is poor
• pressure from your Creditors is mounting
• the business can be a very viable concern

If that is what you are facing up to then a Company Voluntary Administration (CVA) could be the best solution for you.

The purpose of a CVA is to a company to reach a compromise with its Creditors, which may for example result in only 25% of its debts having to be repaid, either by the sale of certain assets or from income from future trading.

Your business is then released from the remaining 75% of its debts. If you can reach agreement with 75% of your Creditors the CVA will be binding on all of your unsecured creditors.

The Benefits of a CVA – they

• can quickly improve cash flow
• can ease the pressure you face from the Revenue while the CVA is prepared
• can quickly reduce your costs.
• can terminate Contracts of Employment, Leases, unattractive supply contracts
• can allow you to end a Lease at no cost and simply walk away
• can allow you to terminate Directors or Managers Contracts
• can allow you to get rid of Employees without having to make Redundancy payments as pay in lieu of notice is paid paid by the Government
• usually allow existing Directors and Shareholders to remain in control of the business
• are less expensive than an Administration or Receivership
• can be attractive to Creditors as they retain you as a customer and receive a dividend on their debts