Negotiating CVA

Negotiating CVA

What’s involved?, the pro’s and con’s and how we help you to establish if a CVA is the best route forward for you.

What’s involved?, the pro’s and con’s and how we help you to establish if a CVA is the best route forward for you.

What’s involved? – CVA terms?

What % of debts are paid?

This is not fixed, but negotiable. It can be different for different classes of Creditor – Staff (100%) – HMRC – Landlord – Trade. Clearly the overall commitment must be one which the forward business forecast shows to be achievable from post-tax profits.

A lump sum settlement

Will normally offer Creditors monies not otherwise available to them. This may be a voluntary payment from a third-party on the company’s behalf (the Directors themselves? Friends? a partnering commercial enterprise?). Or it might be a pledge of funds that will only fall due to the company at a future date if it continues to trade

An extended payment proposal

Will be supported by an accurate current balance sheet and recent trading performance history and a forward business forecast covering the period over which the Company says it will make payments to its Creditors from operating profits.

To do? – CVA upsides?

Five upsides to a CVA rather than a Fresh Start Company
  • Minimised disruption – customers need not notice the change
  • Termination of premises or equipment leases can often be avoided
  • Requires no report to the insolvency service on Director conduct
  • Easier to gain continuance with key suppliers who are bound in
  • After CVA is completed credit agencies can show CVA debts settled

Not to do? – CVA downsides?

Five downsides to a CVA rather than a Fresh Start Company
  • Hard to make enough post-tax profit to meet CVA payments
  • Company will be trading with a negative CVA credit profile
  • CVA conditions restrict Director’s freedom including to borrow
  • Staff arrears not met by government – paid as creditors
  • Creating proposal is difficult and may not be accepted

How to do? – We manage the whole CVA task?

These are the steps we take to agree a worthwhile CVA
  • Assess Current Financial Position and Discuss Futures
  • Advise on a Viable Shape of CVA for your Company
  • Defend Short Term against any pressing Creditors(s)
  • Help you create The CVA Proposal and Financial Forecasts
  • Assist as needed to Negotiate Acceptance by Creditors

Which is the best route for you?

Shall use our expertise and experience to negotiate an affordable CVA, or shall we close the Company by a safely managed CVL and transfer your business seamlessly to a debt free NewCo?

What’s involved? – CVA terms?

What % of debts are paid?

This is not fixed, but negotiable. It can be different for different classes of Creditor – Staff (100%) – HMRC – Landlord – Trade. Clearly the overall commitment must be one which the forward business forecast shows to be achievable from post-tax profits.

A lump sum settlement

Will normally offer Creditors monies not otherwise available to them. This may be a voluntary payment from a third-party on the company’s behalf (the Directors themselves? Friends? a partnering commercial enterprise?). Or it might be a pledge of funds that will only fall due to the company at a future date if it continues to trade.

An extended payment proposal

Will be supported by an accurate current balance sheet and recent trading performance history and a forward business forecast covering the period over which the Company says it will make payments to its Creditors from operating profits.

To do? – CVA upsides?

Five upsides to a CVA rather than a Fresh Start Company
  • Minimised disruption – customers need not notice the change
  • Termination of premises or equipment leases can often be avoided
  • Requires no report to the insolvency service on Director conduct
  • Easier to gain continuance with key suppliers who are bound in
  • After CVA is completed credit agencies can show CVA debts settled

Not to do? – CVA downsides?

Five downsides to a CVA rather than a Fresh Start Company
  • Hard to make enough post-tax profit to meet CVA payments
  • Company will be trading with a negative CVA credit profile
  • CVA conditions restrict Director’s freedom including to borrow
  • Staff arrears not met by government – paid as creditors
  • Creating proposal is difficult and may not be accepted

How to do? – We manage the whole CVA task?

These are the steps we take to agree a worthwhile CVA
  • Assess Current Financial Position and Discuss Futures
  • Advise on a Viable Shape of CVA for your Company
  • Defend Short Term against any pressing Creditors(s)
  • Help you create The CVA Proposal and Financial Forecasts
  • Assist as needed to Negotiate Acceptance by Creditors

Which is the best route for you?

Shall use our expertise and experience to negotiate an affordable CVA, or shall we close the Company by a safely managed CVL and transfer your business seamlessly to a debt free NewCo?

Call me to discuss whether a CVA is you’re best route forward

Call in confidence and without obligation for free, practical and professional advice

Michael O’Connor MABRP : Managing Consultant

Michael OConnor Managing Consultant Insolvency Solutions

Call me to discuss whether a CVA is you’re best route forward

Call in confidence and without obligation for free, practical and professional advice

Michael OConnor Managing Consultant Insolvency Solutions

Michael O’Connor MABRP
Managing Consultant

Bristol
0117 901 2285

Chichester
01243 624716

Hereford
01432 291049

Horsham
01403 839766

Bristol
0117 901 2285

Chichester
01243 624716

Hereford
01432 291049

Horsham
01403 839766

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3 + 9 =


…guidance through a very tough time, protecting us from hassle and available when needed to answer some very tricky and challenging queries

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Design Company Sussex


sale and lease-back of assets ahead of distraint gave us space to survive

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Computer Company


ability to sound Creditors out…and understand what can be negotiated

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IT Cloud Support


many thanks for your calm management…and persuading (the Petitioner) to drop their hostile action

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South West Builders


…guidance through a very tough time, protecting us from hassle and available when needed to answer some very tricky and challenging queries

spacer

Design Company Sussex


sale and lease-back of assets ahead of distraint gave us space to survive

spacer

Computer Company


ability to sound Creditors out…and understand what can be negotiated

spacer

IT Cloud Support


many thanks for your calm management…and persuading (the Petitioner) to drop their hostile action

spacer

South West Builders