Expert Answer

A Company Voluntary Arrangement (CVA) is a legal agreement between a company and its creditors which sets out a repayment plan to repay historical debts from future profits. This process relieves creditor pressure and allows one consolidated monthly payment to be made to the Supervisor of the CVA. Debts in a Company Voluntary Arrangement are frozen and the creditors involved agree to write off a proportion of their debt to secure a higher return than if the company were to proceed into Liquidation.

A CVA differentiates itself from other forms of insolvency because the directors retain control of the company. It is viewed as a ‘rescue’ mechanism. More Information on CVA can be found by clicking here.