Company voluntary arrangements
213973833
A snapshot of company voluntary arrangements: Success, failure and proposals for reform
Company Voluntary Arrangements (CVAs) are designed to be used in the UK to rescue a company as a going concern. They are under used in practice and have a reputation for high failure rates. This article, based upon a longer report funded by the UK insolvency profession, considers the nature of success or failure of CVAs. It considers empirical evidence to identify the weak points of CVAs in practice. It looks at quantitative data as well as taking into account views of practitioners and other stakeholders. Key elements of the CVA procedure are considered in light of recent national reform proposals and approaches and reforms internationally. Domestic reforms in the Netherlands and South Africa are considered to determine whether any lessons might be learnt from other jurisdictions. Recommendations are made including changes to the suggested amendments to the legal framework and to professional practice guidance.
Peter Walton Christopher Umfreville Lezelle Jacobs
166819442
Company Voluntary Arrangements and Administrations
Geoffrey M Weisgard Michael Sept Griffiths
214396248
Pre Packaged Administrations and Company Voluntary Arrangements: The case for a holistic approach to reform
The Company Voluntary Arrangement "CVA" and pre packaged administration "pre pack" both facilitate corporate rescue and enable the continuation of a business by its existing management, though in very different ways. Through analysis of longitudinal studies of CVAs and connected party pre packs commenced in 2013, this paper provides a comparative analysis of the outcomes of the processes and their impact on stakeholders. In so doing the paper identifies issues arising from the operation of these procedures and makes suggestions for reform, both to the processes and the need for wider systemic reform.
Christopher Umfreville
169112758
Company Voluntary Arrangements: Evaluating Success and Failure
The report considers the reasons for the 'success' or 'failure' of company voluntary arrangements "CVAs" and investigates the outcomes where CVAs 'fail' The frequency of CVAs is reasonably low when compared with alternative corporate Insolvency Act 1986 procedures and it has been commented that CVAs have a high failure rate. The research project aims to identify 'successful' and 'failed' CVAs and by doing so, identify key characteristics which will in turn allow practical guidance to be provided to insolvency practitioners "IPs" and also inform policy recommendations to Government. The report combines evaluation of empirical research concentrating on CVAs in England and Wales, surveys of insolvency practitioners and interviews with stakeholders to identify the characteristics of 'successful' and 'failed' CVAs. This is done in the context of national and international insolvency law developments and consultations including comparative analysis. The report present recommendations for reform to address the issues identified in the research and to improve CVA outcomes.
Peter Walton Christopher Umfreville L M Jacobs
167811771
Conflated Arrangements: A Comment on the Company Voluntary Arrangements in the Proposed Nigerian Insolvency Act 2014
The paper examines the effectiveness of the Company Voluntary Arrangements procedure 'CVA' in the proposed Nigerian Insolvency Act, 2014. Like in Insolvency Act 1986 of England and Wales, from which it has been transplanted, the CVA procedure provides a parallel procedure to the complex Arrangements and Compromise procedure in the Companies and Allied Matters Act, 2004. The first hurdle is the dearth of information on the challenges of the extant arrangements and compromise procedure, and the absence of the terms of reference on which the proposed reforms have been drafted. Nonetheless, relying on data culled from empirical studies, case law and practitioners' proposals, three problems are identified for discussion: the absence of a moratorium which exacerbates the complexity of the Nigerian High Court system and undermines the process; lack of clarity; and a pervasive mistrust of arrangements proposed by insolvent companies. Unfortunately, the proposed CVA procedure does little to alleviate these problems. It elides arrangements and compromise with the CVA procedure. It also fails to propose an effective moratorium regime.
Bolanle Adebola
167867014
Preliminary Report to the UK Insolvency Service into Outcomes in Company Voluntary Arrangements
Corporate bankruptcy law in the UK offers distressed companies a range of formal rescue and restructuring procedures which seek to facilitate the continuation of the company and/or its business. One such procedure is the company voluntary arrangement (or CVA for short) A CVA is essentially a voting mechanism which allows a restructuring proposal to be brokered by the company with the assistance of a licensed insolvency practitioner and implemented if it is approved by the requisite majority of creditors. CVAs take two forms. The first is a "stand alone" CVA which does not provide for a moratorium (stay) on creditors' claims in the period before the creditor vote. The second is a "CVA with moratorium" which provides for a pre vote moratorium of up to 28 days. However, the CVA with moratorium is only available to small companies which satisfy defined eligibility criteria. Proposals to introduce a "CVA with moratorium" model accessible by all companies were consulted on by government during 2009 and 2010. UK bankruptcy policy is therefore drifting towards the idea that a moratorium may be needed, more often than not, to facilitate the approval and implementation of otherwise viable restructuring proposals. Yet there is very little empirical evidence as to how the existing CVA procedures are working and whether they generate successful outcomes. This paper (which takes the form of a report commissioned by government) contains the results of a preliminary investigation of CVA outcomes under the existing law. It seeks to provide a basic foundation for further hypothesis formation, research and policy evaluation. Our dataset consists of all 547 CVAs recorded as commencing in 2006 in England and Wales the raw data deriving from mandatory filings at Companies House, the UK companies registry. Having identified thirteen different outcomes in the entire population, we analyse a sample of 177 CVAs (32.4% stratified according to the outcomes observed in the population to produce a range of descriptive statistics. With some notable exceptions such as the restructuring of the English Federal Mogul/T&N group companies CVA usage is dominated by small companies. This of itself is not surprising bearing in mind that the vast majority of "live" company registrations in the UK consists of small companies. However, despite high levels of eligibility, we find that barely any of these companies use the small company "CVA with moratiorium" procedure. Chief among our other findings is that the "stand alone" CVA appears to be used relatively successfully in some cases as a substitute for a winding up procedure rather than as a restructuring mechanism. We also detect some possible abuse at the margins in that companies which have failed to comply with the terms of the restructuring are able to exit from the CVA straight to a dissolution, thus enabling their directors to escape scrutiny under our wrongful trading and director disqualification legislation.
A J Walters Sandra Frisby
168610807
Company voluntary arrangements
Brenda Hannigan
166458480
The Extension of Small Company Voluntary Arrangements: A Response to the Conservative Party's Corporate Restructuring Proposals
In a recent article I highlighted the background, growth and possible use of Company Voluntary Arrangements (CVAs) in the corporate restructuring sphere. In particular I argued that consensual Part 1 Insolvency Act 1986 CVAs, i.e. CVAs without moratoriums and used outside administration, could provide a low cost effective restructuring tool. In this essay I argue in the alternative that the small CVA provisions as introduced by the Insolvency Act 2000 and now represented in Schedule A1 of the Insolvency Act 1986 could be extended to large companies (i.e. those outside s.247 Companies Act 1985 or s.382 Companies Act 2006) so as to allow large company restructuring with the benefit of a moratorium without the costs associated with an accompanying Administration Order being in place. In so doing I go someway to respond to the Conservative Party's recent call for the adoption of Chapter 11 type automatic stays into English law. It is argued that instead of adopting a new form of business restructuring tool as advocated by the Conservative Party, which is largely reminiscent of the Irish Examinership model, we should instead extend the small CVA provisions (Schedule A1 Insolvency Act 1986) to larger companies therefore reducing associated reform costs as well as benefiting from a reduction in associated Administration Order costs.
John Tribe
108849790
Risanamento dell'impresa e valorizzazione dell'autonomia privata nel diritto inglese ed italiano: i Company Voluntary Arrangements ed il concordato preventivo
La crisi dell'impresa e la necessita delle procedure concorsuali. Insolvency law e i company voluntary arrangements. La disciplina concorsuale in Italia e il concordato preventivo. Analisi comparatistica.
Diletta Antenucci
154882335
What's the future for company voluntary arrangements?
Adam Leo Gould