Failed Voluntary Arrangement Petitions
A Company Voluntary Arrangement (CVA) can be a very useful tool for a business in financial difficulty to satisfy their debts to creditors over a period of time, without needing to go into full liquidation.
About Failed Voluntary Arrangement Petitions
The business and its creditors agree to follow the legally binding terms of the arrangement, and once the CVA runs its full course, the debts are usually considered settled.
However, in the case of failed voluntary arrangement petitions, when one or more of the terms is breached, there can be a number of different outcomes, depending on the specifics of the arrangement in question.
At Forbes, our specialist insolvency team can support either the business or the creditors with expert advice on CVAs and what the next steps are with failed voluntary arrangement petitions.
What happens if a CVA fails?
If either party breaches the terms of a CVA, the arrangement should specify the steps to be taken in such a situation. For some CVAs, it will mean that the agreement is essentially terminated and another solution is required for the company and the creditors. For others, a breach might mean that a specific action will be triggered, such as moving to put the business into administration or to petition for winding up.
The CVA may include provision of an opportunity for the breach to be resolved without the arrangement failing automatically. For example, if the business has missed a CVA payment, they may be given a set period in which to settle this.
It's essential before entering into a CVA that it's clear what will happen in the event of a breach and there may be different actions triggered, depending on the nature of the breach itself. These may be categorised as minor or major breaches.
What happens if a CVA fails?
If either party breaches the terms of a CVA, the arrangement should specify the steps to be taken in such a situation. For some CVAs, it will mean that the agreement is essentially terminated and another solution is required for the company and the creditors. For others, a breach might mean that a specific action will be triggered, such as moving to put the business into administration or to petition for winding up.
The CVA may include provision of an opportunity for the breach to be resolved without the arrangement failing automatically. For example, if the business has missed a CVA payment, they may be given a set period in which to settle this.
It's essential before entering into a CVA that it's clear what will happen in the event of a breach and there may be different actions triggered, depending on the nature of the breach itself. These may be categorised as minor or major breaches.
How we can help with failed voluntary arrangement petitions
We can offer specialist advice whether you are the business involved in the CVA or are the creditors. Our experienced team will ensure that you have all the accurate information you need to make decisions about what to do next and the actions that are in your best interests.
We always aim to achieve the best possible outcome for every client, helping to advocate for you and offering support at every stage of the journey.
How we can help with failed voluntary arrangement petitions
We can offer specialist advice whether you are the business involved in the CVA or are the creditors. Our experienced team will ensure that you have all the accurate information you need to make decisions about what to do next and the actions that are in your best interests.
We always aim to achieve the best possible outcome for every client, helping to advocate for you and offering support at every stage of the journey.
Our dedicated Failed Voluntary Arrangement team
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