Yes. You will need to be prudent with your cash flow budgets as your suppliers may not be prepared to extend credit to the company – particularly in the early days of the CVA. Within particular industries it can be difficult to trade within a CVA for this reason.
This is based on the budgets for the company and what the company can afford to pay.
If you have an ‘in house’ accountant or external accountant we will liaise with them and yourselves. Otherwise, we have a team of skilled accountants who will discuss carefully with you the future plan for the business and produce the information necessary. Time is of the essence to prepare this information to assess the viability of the future trade.
The directors remain in control of the company. As Supervisor to the CVA our role would be to oversee that the terms of the CVA are being complied with.
In the first instance you should make contact with us at the earliest opportunity to fully discuss the problems. We would work with you, and your accountants to overcome any difficulties. If the difficulties continued the viability of the CVA would become an issue. Ultimately, it is usually a term of the CVA that the Supervisor issues a winding up petition against the company upon the failure of the CVA.
Only a Licenced Insolvency Practitioner (IP) can act for a company who wish to enter a CVA. Up to the date of the Creditors’ meeting (and the formal approval of the CVA) the IP is called the Nominee and after the Creditors’ meeting (assuming the CVA is approved) is called the Supervisor.
As part of the business plan for the company to return to profitability there may be redundancies of your employees. Any employee entitlements would be paid by the Redundancy Payments Service (a Government department) and these payments would rank as a creditor who would receive dividend payments under the terms of the CVA.
No. Unlike, a Creditors’ Voluntary Liquidation or Administration or Pre-pack Administration these all require such a report to be completed.
There is a separate Nominees fee and Supervisors fee. The Nominees’ fee is agreed with the directors when you instruct us to proceed. The level of this fee depends on the work involved and can be as little as £3500.
The Supervisor’s fees are usually fixed by the creditors’ and are typically £3000 to £4000 each year of the CVA.
We would explain the details and the advantages of supporting the CVA and would do this as soon as practically possible. To have the support of your bank and major creditors’ is vital to achieve success of the CVA.