Company Voluntary Arrangement (CVA)

A Company Voluntary Arrangement (CVA) is legislation that enables a company to make a private arrangement with all its unsecured creditors. It allows a business to reach a company debt compromise with the organisation it owes.

The company could:

• Freeze the company’s debt and any interest charges
• Repay the debt in affordable monthly instalments
• Prevent creditors from taking further action against your company
• Write off a proportion of the company’s debts with creditors’ consent

A CVA can be tailored to suit the company’s and creditors’ needs. It could involve a five-year payment plan or a full and final settlement in the form of a lump sum to creditors, or a combination of the two.

A CVA avoids the need for liquidation, can save jobs and investments. Unlike liquidation, the supervisor is not required to investigate the directors’ conduct or submit reports to the DTI. However, if the directors’ conduct has been severely lacking, the supervisor must inform creditors, which could affect their desire to support the CVA.