11 April 2018: We previously posted that CVAs (Company Voluntary Arrangements) are an under-utilised resource across the insolvency profession. BRI are delighted to announce that, for the second time in 12 months, the Milton Keynes office is overseeing the successful completion of another CVA.
Under the terms of the arrangement, the company undertook to pay monthly instalments over 2 years, which was anticipated to result in a much better return to creditors than would have been available in a liquidation.
Whilst the duration of a CVA is usually 3-5 years, the directors’ proposal sufficiently demonstrated to creditors that a shorter arrangement would be in their best interests.
The success of a CVA is largely dependent on a couple of key factors. Firstly, the IP must fully understand the company’s proposal at the outset and, having objectively considered its merits, be confident that it has a reasonable prospect of being accepted and implemented. This requires the IP to exercise their independent professional judgment at all times. Unrealistic proposals invariably lead to failed arrangements and result in a compulsory liquidation where creditors can expect little or nothing back.
The second key factor is the co-operation and commitment of the directors to see the arrangement through to successful completion. In this particular case, the directors’ commitment was evident, despite their involvement in new ventures.
This success story is a further example of how BRI will seek out innovative solutions when companies find themselves in financial difficulties, giving the right advice, first time, every time regardless of fee outcome for ourselves. We believe in getting the best results for all stakeholders.
If you would like to discuss a CVA or any other insolvency matter affecting you or your client, please contact one of our experienced management team.