21 April 2020: At BRI Business Recovery and Insolvency we recently approached a client of ours that is in a CVA to discuss the impact of the coronavirus upon their business.
It was clear that prior to the outbreak business was growing with a strong order book and profits. However, given that there is significant trade both with customers and suppliers within Europe, with many of those countries entering lockdown prior to the UK, it was clear that trade and future cash requirements would be negatively impacted in the short term.
It was agreed with the client that their cash requirements to trade forward would need support from all angles. One of those included their commitments to the CVA. As such, we approached the major creditor and sought their appetite to support a six month deferment on contributions. This was agreed and subsequently put to all creditors by way of a formal variation.
It would appear that creditors, including HMRC, recognise the significant impact of the current situation and are willing to support the company through these difficult times. With this solution, the client’s ability to defer significant cash outlays for six months ensures the strongest likelihood of success for them and the creditors of the CVA.
Whilst we don’t always know that our customers are in further difficulty until they tell us, where it is obvious, such as the current pandemic, we will always reach out to see what we can do.