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Royal Stafford Pottery Goes Bust

Royal Stafford based in the Royal Overhouse Manufactory, one of the oldest pottery factories in Burslem has collapsed into liquidation. The Stoke-on-Trent pottery business employed some 70 people.The Royal Stafford brand was established in 1845 and the firm described itself as one of the handful of potteries with all production taking place in England."This must be a wake-up call for decision makers," said Colin Griffiths, GMB senior organiser. "The loss of Royal Stafford is a huge blow to workers and the entire community here in Stoke."Our city cannot power its kilns with wind and batteries; wishful thinking means spiralling energy costs are now pushing the sector over the edge."Meanwhile the illegal importing of foreign forgeries is out of control and driving down orders even further."Our ceramic and pottery industry is vital for economic growth and supports thousands of jobs across the UK."The time for warm words is over, now we must see action." Why has Royal Stafford gone into liquidation rather than administration? The most probable reason is simply that there was unlikely to be any buyer for the business.  For a company to go into administration the insolvency practitioners have to show that the return to creditors would be better in administration than in liquidation ie "a better result".  Administration can be expensive so there has to be a reasonable prospect of this. 

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Royal Stafford Pottery Goes Bust

Electric Delivery Company Zedify Goes Into Administration

Zedify, the UK's largest electric freight bike delivery network, has gone into administration, resulting in the loss of over 100 jobs.Zedify, founded in 2015, provides zero-emission last-mile logistics services to businesses such as high-street stores, package carriers, and independent businesses.The investment came after Zedify received a £5 million funding round in March 2023 from the same investors, including Barclays Sustainable Impact Capital and Mercia, which enabled the company to grow from 113 to 209 people and sign sponsors such as Hello Fresh, Selfridges and Veja.However, despite increased demand for sustainable delivery services, the company was unable to secure enough finance to continue operations. As a result, on January 31, it appointed Interpath's Will Wright and Steve Absolom as Joint Administrators of Outspoken Logistics Limited, also known as Zedify.The company's hubs in Cambridge and Edinburgh remain operational, with 38 staff retained while the Joint Administrators look into future options for these locations. Furthermore, the Bristol hub is run by a separate legal corporation and continues to operate.However, the Joint Administrators have begun an orderly wind-down of the remaining business and have closed seven of the company's trading centres. As a result, 105 individuals have lost their jobs.Ravi Patel of Interpath, who is handling the sale of the company's business and assets, stated: "Zedify was considered a pioneer within the logistics market, being the UK's first cargo bike delivery service with a zero-emission, last-mile delivery model. We are working to explore all options and are seeking buyers for the business and its assets, including its fleet of electric bicycles and their associated intellectual property, as well as the Zedify brand."Steve Absolom, Interpath's Managing Director and Joint Administrator, stated: "We understand news of the company's insolvency will be devastating to its team of employees. We'll endeavour to provide support to those impacted by redundancy, including assisting them with claims to the Redundancy Payments Service."

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Electric Delivery Company Zedify Goes Into Administration

RBG Holdings Rosenblatt Law’s Owners Likely to Go Into Administration

The listed owner of Rosenblatt law firm is likely to go into administration after rescue talks failed, the company announced today.RBG Holdings was in talks with its founder and largest shareholder Ian Rosenblatt and another party to resolve its boardroom issue.The board ‘regrettably’ informed the London Stock Exchange today that while talks with Rosenblatt Law Limited, a new firm co-founded by Ian Rosenblatt, were progressing, conversations with the other party had terminated.Considering the company's financial position and the lack of progress on the various strategic options explored, the board believes it is unlikely to secure the funding it needs in a timely manner to secure the company's future and is now taking action to protect value in the business for creditors and other stakeholders.The board proposed a share trading suspension starting this morning.RBG Holdings, which owns London lawyer Memery Crystal, said it continued to trade and had the support of its key creditors earlier this month while exploring balance sheet strengthening alternatives. Even though RBG and Rosenblatt had fought days earlier, talks began with Rosenblatt Law Limited. Rosenblatt claimed the company was insolvent, while RBG terminated his consultant arrangement for ‘offensive actions unbecoming of a solicitor’.RBG was optimistic and indicated it would have enough funds for the foreseeable future if possible purchasers agreed. If its primary creditors cannot agree, the company must quickly pursue alternative financing options.RBG would suffer its ultimate blow if it entered insolvency after four years of boardroom battles and a falling share price. Even after an early post-IPO rally in 2018, when acquisitions pushed shares to 160p. The share price closed yesterday at 0.89p.If you are a struggling law firm then we can help.Read our Lawyer Help Pages

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RBG Holdings Rosenblatt Law’s Owners Likely to Go Into Administration

Quiz Clothing In Administration Rumours

updateSky News has reported that Quiz, which is chaired by the former JD Sports chief Peter Cowgill, is lining up Teneo as administrator in a move expected to take place before the end of next week. According to reports, Quiz is purportedly looking to close up to one-third of its stores in order to stabilise its struggling business and reduce costs.The fast fashion chain, which now employs about 1,500 could lose hundreds of jobs as a result of the move, which was lead by the founding Ramzan family.Quiz has hired restructuring specialists at Teneo to investigate its possibilities. Quiz is scheduled to delist from the London Stock Exchange's AIM market and return to private ownership after a shareholder vote earlier this month.Possible actions to help with the closures include a company voluntary arrangement (CVA) or pre-pack administration.A person familiar with the matter told the Telegraph who originally broke the story that "nothing is being ruled out," and that a decision is anticipated in the upcoming weeks.Since taking over as CEO in March 2023, Sheraz has reportedly concentrated on reducing expenses by selling off the chain's underperforming locations.With only £2.3 million in liquidity, including £400,000 in cash reserves and £1.9 million in undrawn banking facilities, Quiz disclosed in the lead-up to Christmas that it was on the verge of going bankrupt.Sheraz's father, Tarak, who started Quiz in 1993 with just one store in Glasgow, gave the business an emergency loan of £1 million last summer. Quiz is now frantically looking for additional finance, probably on harsher conditions, as HSBC is apparently unwilling to continue backing the company.In contrast to its £2.3 million profit the year before, Quiz reported losses of almost £7 million last year. The job of leading the retailer through its turnaround has been placed on chair Peter Cowgill, a former manager of JD Sports.In the upcoming weeks, a formal announcement on the company's future is expected.With Poundland and now Quiz are we going to see a string of retail failures?  At least a CVA gives the company a good chance of continuing to trade

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Quiz Clothing In Administration Rumours
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Monthly Insolvency Statistics: December 2024

in Research and Statistics

In 2024, there were 23,872 registered company insolvencies, which included 18,840 creditors' voluntary liquidations (CVLs), 3,230 compulsory liquidations, 1,597 administrations, 202 company voluntary arrangements (CVAs), and three receivership appointments. The overall number of corporate insolvencies in 2024 was 5% lower than in 2023, the greatest yearly figure since 1993.The reduction in overall firm insolvency numbers in 2024 was mostly driven by CVLs, which were 8% lower than the record high levels recorded in 2023. The number of obligatory liquidations grew by 14% from 2023, reaching its highest level since 2014. Administrations (increased 2%) and CVAs (up 9%) both exceeded 2023 levels.In 2024, one in every 191 firms on the firms House effective register (at a rate of 52.4 per 10,000 companies) becam insolvent, down from 57.2 per 10,000 in 2023. The 2024 insolvency rate is significantly lower than the peak of 113.1 per 10,000 enterprises experienced during the 2008-09 recession, despite the fact that 2023 and 2024 had comparable levels of insolvencies. This is because the number of businesses on the effective register has more than doubled.​Monthly Summary for December 2024 Following seasonal adjustments, the number of registered company insolvencies in England and Wales was 1,838 in December 2024, 6% lower than in November 2024 (1,962) and 14% lower than the same month the previous year (2,139 in December 2023). The number of corporate insolvencies remained significantly greater than those observed during the COVID-19 epidemic and between 2014 and 2019.Company insolvencies in December 2024 included 273 compulsory liquidations, 1,421 CVLs, 127 administrations, and 17 CVAs. There were no receivership appointments. Compulsory liquidations and CVAs were up from November 2024, while CVLs and administrations were down.There has been much comment lately about the number of increased compulsory liquidations being due to the increased taxes imposed by the government.  However, in our view, given that the overall insolvency rates have decreased, the most likely reason for these compulsory liquidations increase is a "mopping up" of the delinquent companies that have already stopped trading, owe tax, and failed to pay back bounce back and other loans following the pandemic.

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Monthly Insolvency Statistics: December 2024

Poundland in CVA rumours

Sky News has reported that Polish-based Pepco Group, which has controlled Poundland since 2016, has recruited AlixPartners, the retail experts, to handle a sales dip that has prompted worries about company's future.  The company operates over 850 sites and employs 18,000 staffLike for like sales were down 7.3% over the crucial Christmas period.AlixPartners is understood to have been formally engaged last week, with options including a company voluntary arrangement (CVA) or restructuring plan said to have been discussed by a range of advisers on a highly preliminary basis.In its trading statement, Pepco said that Poundland had suffered "a more difficult sales environment and consumer backdrop in the UK, alongside margin pressure and an increasingly higher operating cost environment"."We expect that the toughest comparative quarter for Poundland is now behind us - the same quarter last year represented a period prior to the changes made within our clothing and GM [general merchandise] ranges - and therefore, we expect the negative sales performance for Poundland to moderate as we move through the year."​The company is said to be looking at multiple ways to improve its cash position by selling more goods over £1 to expand its range of products.The mere fact that it has been leaked that a company voluntary arrangement (CVA) has been discussed is pertinent.  The reason is because talk of a CVA can be a very useful tool to put pressure on landlords to consider rent reductions.  Under a CVA the retailer can exit leases, at no cost, leaving landlords out of pocket.  To understand a bit more about this please read our CVA and retailers article.Of course it is also likely that the company will come under extra pressure from the increases in minimum wage, NI increases and the loss of 75% business rates relief.Since the cost of living crisis there has been strong competition from other discounters like B&M and Poundstretcher.  Poundstretcher themselves used a CVA to reduce costs. They exited in 2022 paying just 12p in the £1 to its unsecured creditorsIf such a big retailer were to fail this would send shockwaves through the sector and would be a political headache for the Labour Government.​​

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Poundland in CVA rumours

Restructuring Advisors Expect Challenges To Continue for Charities in 2025

in Charities News

The number of charities facing financial difficulty is expected to rise this year due to an unprecedented demand for support against a backdrop of increasing costs and reducing income.That is the view of a North East restructuring expert, Chris Ferguson, who is Director of Recovery & Insolvency at RMT Accountants & Business Advisors based in Gosforth, Newcastle.The charity sector continued to see high levels of distress in 2024 with the recent insolvency of counselling charity, Relate, being the latest high profile casualty within the not for profit and community services sector. The Chancellor’s Autumn Budget in October 2024 set out measures to help charities in the wake of the ongoing challenges facing the sector, but the rise of the national living wage and employer national insurance contributions (NICs), effective from April 2025, will place further burden on the finances of charitable organisations that are already struggling to cope.Charity revenues are particularly susceptible to turbulent economic conditions.  In addition to impending cost increases, the cost-of-living crisis continues to impact the disposable incomes of prospective donors, with increasing food and energy prices and the withdrawal of the winter fuel allowance likely to impact donations, placing further pressure on charity resources.  Trustees are therefore being warned that the rise of charities in financial difficulty is likely to continue in 2025.Findings from research undertaken by the Charities Aid Foundation (CAF) in 2024 showed that many charities are at maximum capacity and many more are being forced to make difficult decisions on who they can help.  But, despite the overwhelming requests for support, one in eight charities are faced with having to make redundancies or reduce staff numbers.  Half of charities reported that the cost-of-living crisis had negatively impacted staff and volunteer morale (52%) and many were struggling to recruit or retain suitably qualified candidates or volunteers (51%).And CAF research shows that many charity leaders stated that they spend most of their time firefighting, with a third stated they feel the sector is ‘unhealthy’. Chris Ferguson warns that Trustees need to urgently focus their attention on maintaining accurate financial information and emphasises the importance of Trustees continuously monitoring their financial position. He says “Trustees must focus on monitoring and forecasting their income and expenditure for the year ahead, particularly given the significant wage and NIC cost increase they will face later this year following the announcements in the Autumn Budget.  All Trustees have an obligation to ensure they have full visibility over their charity’s operation, ensuring that resources are managed responsibly and they are acting with reasonable care and skill when undertaking their role”. Trustees must not lose sight of the importance of recognising these responsibilities, particularly where charities find themselves in financial difficulty.  “Trustees are often volunteers giving up their own time to support their local communities.  However, many do not fully appreciate that they can become personally liable for charity losses if they have not complied with their basic duties as a Trustee. This is clearly a risk many Trustees do not envisage when they agree to take on a voluntary role.” Ferguson warns. Trustees are advised that some of the key warning signs of distress may include:-Minimal levels of unrestricted funds Declining income levels from donations or grants Reducing profitability, or the charity is running at a deficit Arrears with landlords and suppliers Discovery of financial irregularities Where Trustees believe that a charity is in financial difficulty, they should seek immediate professional advice.  “We have supported a number of charities with financial issues over the past 12 months.  Seeking support as early as possible means that Trustees are complying with their own statutory duties as representatives of charities.  Initial advice is often free, so there is no cost for seeking independent professional advice as early as possible”. Trustees that require a free initial discussion can contact Chris Ferguson on 0191 256 9500 or by email at chris.ferguson@r-m-t.co.uk or Chris Wray on 0191 256 9500 or by email at chris.wray@r-m-t.co.uk.

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Restructuring Advisors Expect Challenges To Continue for Charities in 2025
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Monthly Insolvency Statistics: November 2024

in Research and Statistics

​After seasonal adjustment, the number of registered company insolvencies in England and Wales was 1,966 in November 2024, 13% higher than in October 2024 (1,743) and 12% lower than the same month in the previous year (2,243 in November 2023). The number of company insolvencies remained much higher than those seen both during the COVID-19 pandemic and between 2014 and 2019. ​Company Insolvencies Company insolvencies in November 2024 consisted of 254 compulsory liquidations, 1,565 creditors’ voluntary liquidations (CVLs), 132 administrations, 14 company voluntary arrangements (CVAs) and one receivership appointment. All types of company insolvency except for receivership appointments (which are rare) were higher than in October 2024.One in 189 companies on the Companies House effective register (at a rate of 52.9 per 10,000 companies) entered insolvency between 1 December 2023 and 30 November 2024. This was a decrease from the 57.3 per 10,000 companies that entered insolvency in the 12 months ending 30 November 2023. Insolvency rates are calculated on a 12-month rolling basis as a proportion of the total number of companies on the effective register. The 12-month rolling rates show longer term trends and reduce the volatility associated with estimates based on single months.While the insolvency rate has increased since the lows seen in 2020 and 2021, it remains much lower than the peak of 113.1 per 10,000 companies seen during the 2008-09 recession. This is because the number of companies on the effective register has more than doubled over this period.  CVLs In November 2024, CVLs accounted for 80% of all company insolvencies. The number of CVLs increased by 8% from October 2024 and was 15% lower compared to the same month last year (November 2023) after seasonal adjustment.In 2023, the annual number of CVLs reached its highest level since the start of the time series in 1960, continuing the year-on-year increases seen since 2021. Between 2017 and 2019, CVLs had been rising at approximately 10% per year, but during the COVID-19 pandemic, they fell to their lowest levels since 2007. Compulsory liquidations The seasonally adjusted number of compulsory liquidations in November 2024 was 37% higher than in October 2024 and 6% lower than in November 2023.The number of compulsory liquidations has increased from record low levels seen in 2020 and 2021, while restrictions applied to the use of statutory demands and certain winding-up petitions (leading to compulsory liquidations). In 2023, compulsory liquidations increased by 44% from 2022 but remained 4% lower than 2019 (pre-pandemic levels). Administrations The number of administrations in November 2024 was 36% higher than in October 2024 and 12% higher than in November 2023 after seasonal adjustment.Numbers of administrations increased during 2022 and 2023 from an 18-year annual low seen during the COVID-19 pandemic in 2021. Current levels are similar to those seen between 2015 and 2019. ​Find the full release here.

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Monthly Insolvency Statistics: November 2024

Didsbury Gin falls into Liquidation

in Company Liquidation

Didsbury Gin, trading as Alderman's Drinks Ltd, has fallen into liquidation.Gareth Howarth of Path Business Recovery Ltd has been appointed to wind up the Manchester based gin brand's business.This voluntary winding up came from the companies annual general meeting in December 2024, where it was agreed the best action forward, based on the liabilities held.Financial struggles were experienced, with almost £200k being owed to creditors, including a Bounce Back Loan owed to Natwest.Didsbury were first introduced to the market in 2017 and appeared on Dragons Den, winning over Dragon Jenny Campbell, who took a third of the business in 2018 and invested £75,000.The brand, known for its hand-distilled creations, came a long way. It earnt a bronze prize for the World's Best Classic Gin at the World Gin Awards of 2022. Founders, Liam Manton and Mark Smallwood were also recognised in 2023 with the Medal of the Order of the British Empire in the New Year Honours List for 'Services to the community during Covid-19' where they instantly took action and swapped production over to hand sanitiser.

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Didsbury Gin falls into Liquidation
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Government Research Into Creditors Voluntary Liquidations Highlights Virtually Nil Return to Creditors

in Research and Statistics

The Insolvency Service has just released its Creditors’ Voluntary Liquidation (CVL) Research Report.  The purpose of this report was to ascertain whether the recent reforms in 2017 on the CVL process had, in fact, made the process more efficient and increased the returns to creditors.Analysis was performed on a randomly sampled dataset of 2,717 completed CVLs which started in 2017.Efficiency was assessed through three quantitative measures: time to complete the CVL, associated costs, and recovery rates for creditors.Time: 6% of the sampled cases were ongoing at the time of data collection. The median duration to complete a CVL was 712 days.Cost: The median cost, represented as fees relative to the estate's value, was 163%.Recovery Rate: The median recovery rate for all creditors was 0%, indicating that in many cases, creditors did not receive any return.One might ask why the median was used, as opposed to the mean, in these calculations.  This is mainly because in the random sample there may well be some very large company liquidations that would distort the statistics.Other interesting statistics that come out of the research are as followsMedian Pre appointment fees were £4000 see the chart below that shows total fees. The overall returns to creditors are very poor.  The charts below shows preferential creditors that in most cases will be employees and HMRC (post 2020) and Fixed charge creditors who are in fact the first in line showing virtually nil return​ ​This poor level of return is concerning as one of the liquidator's jobs is to try and liquidate the assets to repay creditors.  However, remember the company in question has gone into liquidation as it is unable to pay its creditors!  Most directors will try and put off the inevitable and borrow against any assets they may have or sell them before they enter liquidation.  The reality is that most companies do not have any liquid assets that can be easily sold to repay creditors.  Often assets of any value are costly to move or have a limited market value.  In addition, the liquidators have to do an investigation into the directors conduct to see if they should be disqualified. In addition, in the name of transparency, they have a duty to keep the creditors informed of the reasons for failure, and why they are not going to get any return.So, if CVLs offer such low returns to creditors there should be an alternative process that insolvency practitioners should be using and directors should be made aware of!Administrations are costly and mainly for larger businesses.  The alternative is of course the use of more informal deals with creditors such as Time to Pay Arrangements (TTPs) and the use of the Company Voluntary Arrangement (CVAs) insolvency rescue mechanism.  These are harder to implement than simply advising the company to liquidate and of course there must be an underlying profitable business there.  But surely there are companies out there that could pay off some of the debts over a time period of say, 3-5 years.  Even if the CVA or TTP lasts only a year or two it is signicantly better than a CVL that on this research gives Nil return to any creditor!  Remember a CVA doesn't even bind the fixed charge (secured creditor).The number of TTPs are not really recorded as there is no formal insolvency but the number of CVAs are and it is very low at some 15 or 20 a month.As a small firm that does the second highest number of CVAs, after Begbies Traynor who are the largest insolvency firm in the UK, we believe they are ridiculously underused.However using CVAs KSA Group has;Distributed £31m to creditors 2009-2022. This excludes secured debts and secured factoring facilities, much of which have been or will be repaid. Repaid £17.9m to HMRC between 2009 and 2023, remember this for the most part when HMRC was an unsecured creditor (2009-2020). That’s taxpayers money. Saved creditors money. Preserved 320 customers for thousands for suppliers, accountants and professional advisors.Ultimately, the main thing that should come out of this research is that Directors should act early and not bury their heads in the sand.  Also insolvency pratitioners should not be afraid of exploring other options for distressed businesses such as TTPs or CVAs.

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Government Research Into Creditors Voluntary Liquidations Highlights Virtually Nil Return to Creditors

Pizza Hut Restaurants Rescued in Pre Pack Administrator

in Hospitality

Update 17th January 2025 The future of Pizza Hut's restaurants in Britain has been salvaged after the business was sold out of insolvency proceedings to the brand's main partner in Denmark and Sweden.Sky News can reveal that Heart With Smart (HWS), Pizza Hut's dine-in franchise partner in the UK, was sold on Thursday to an entity controlled by investment firm Directional Capital. Heart With Smart (HWS), the operator of nearly 150 Pizza Hut UK restaurants, is in advanced talks with potential buyers on a rescue deal for the dine-in chain's future.The hope is that a successful bidder will be selected in January, following months of discussions. Many trade and financial buyers have expressed interest. Interpath Advisory have been working with HWS on the process.In November, Sky News reported that HWS had started to approach potential bidders after wanting to mitigate the impact of rising taxes announced in the October Budget.Insiders told Sky News that particularly increases coming for the National Living Wage and Employers' National Insurance Contributions, would add around £4m to HWS's yearly costs.The hospitality industry in itself has faced warning signs and even post-Budget, restaurant operators have felt the pressure. Take the recent collapse of TGI Fridays as a prime example!  The Structure The company, which was previously called Pizza Hut Restaurants, employs circa. 3,000 people.It is owned by a combination of Pricoa and the company's management, led by chief executive Jens Hofma.HWS licenses the Pizza Hut name from Yum! Brands.HWS operates all the dine in restaurants in the UK, but any delivery outlets are run separately by individual franchises.The first Pizza Hut restaurant opened in the UK in the early 1970s. The following 15 years of business saw rapid expansion and growth. It was in 2020 that the company faced a Company Voluntary Arrangement, with the result of dozens of restaurants closing and many jobs lost. Will a deal be made and new owner found? Or will this be another casualty in the casual dining, hospitality industry?

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Pizza Hut Restaurants Rescued in Pre Pack Administrator

Wine Rack and Bargain Booze Looking At A CVA

Bargain Booze and Wine Rack off-licences are looking to use a CVA to exit vacant shops according to Sky News ReportsThe shops are owned by Bestway Group, one of Britain's largest privately owned enterprises.  After Conviviality collapsed in 2018, it bought the estate for £7m.One real estate insider said landlords' refusal to compromise prevented the company from exiting the leases.The sources said PricewaterhouseCoopers will lead the CVA before Christmas.Bestway's 200 locations are mostly Bargain Booze and Wine Rack.The threat of a CVA may well put pressure on the landlords to reduce the rent. This is a well known tactic of retailers who need to exit loss making sites. For more information on Retailer CVAs see this page.Bestway operates food wholesale, Well pharmacies, cement, real estate, and United Bank, Pakistan's largest lender.

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Wine Rack and Bargain Booze Looking At A CVA

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