What is a CVA (Company Voluntary Arrangement)?

Company Insolvency in Scotland

in Directors Duties in Insolvency and their Implications Research and Statistics What is a CVA (Company Voluntary Arrangement)?

Is there a genuine company rescue culture in Scotland? There is only one company driving the rescue culture in Scotland, and you have found it!Our firm RMT KSA, who run this website, are responsible for a significant proportion of CVA led rescue work in Scotland.If you run an insolvent or struggling Scottish company the chance of rescue is low. Amazingly, less than 1% of insolvent companies are rescued by a company voluntary arrangement or CVA each year!  This is compared to England and Wales, where proportionally, the CVA is used 4 times as often.So always ask your advisors these questions - What about a CVA - would that work? What is the comparison between CVA and liquidation? What is the comparison between CVA and administration?

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Company Insolvency in Scotland
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Why We Are Experts At CVAs! Read Our Story

in What is a CVA (Company Voluntary Arrangement)?

KSA Group started taking formal insolvency appointments in 2009 with the merger of KSA Group and Marlor Walls in the summer of that year.Since then we have learned a massive amount about the technique, we’ve gained experience from dealing with over 360 CVA appointments between 2009 and September 2025 . That’s 320 crisis situations - devising appropriate rescue and turnaround strategies together with our clients’ boards of directors, their lenders investors and stakeholders like creditors, landlords and employees. As a result of our expertise KSA Group was bought by RMT Accountants & Business Advisors in October 2024Many (not RMT though!) in the insolvency market have a negative approach to the CVA tool.Variously over the years we have been told that “CVA doesn’t work, they are never the best solution, they hardly ever succeed. Creditors get nothing. HMRC will not support a CVA” and we understand that approach. Often clients or prospective clients report to us that other insolvency firms rubbish the CVA tool. Perhaps that’s why CVAs are not that common. Only 165 have been approved nationally in the year to 30th December 2024.We beg to differ. A well structured, “fit, fair and feasible CVA” scheme can:Rescue viable businesses when a critical event has occurred. Help a determined management team rebuild a failing business. Save jobs of employees. It is likely that KSA saved over 11,000 jobs from 2009-2022. Save directors livelihoods and health. Return money to creditors: KSA 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.Nobody knows more than the RMT KSA team, that CVA rescues are tough to construct, tough to implement, and tougher still for companies to successfully recover from.  We have filed more successful CVAs than any other practitioner.  We can send the research to you if you want. Please email robertm@ksagroup.co.uk for the FOI request reply from Companies House.The London Gazette (the official paper of record dating back to the 17th Century) has published an article about CVAs written by Keith.Diligent and organised directors can use this enormously powerful tool, case law and best CVA practice to drive a turnaround but only if guided by experienced turnaround and insolvency professionals. Be under no illusion this is tougher on the directors than anything they will do in their careers. Emotionally, intellectually and physically the CVA led turnaround requires directors to have resilience, physical and mental determination and a good guide.Of course, not all CVAs reach full term but the process secured jobs, paid back creditors a good chunk of what they were owed and with that helped reduce directors liability under their personal guarantees!Conversely, some clients paid off a 3-5 year CVA scheme debts in 6-18 months. Others went through mergers and acquisitions processes, which preserved jobs and businesses. Many plodded on to successfully pay back the CVA as planned. Still the key for us is we did our best to help our clients and creditors recover from a crisis.It has to be said that even with RMT KSA’s “evangelical zeal for CVAs “ as an insolvency firm, the majority of our work by case numbers is normal voluntary liquidations and administrations. Too many SME directors leave the decision to take advice from the insolvency world far too late. Would we have rescued more of these liquidations had the directors only approached us sooner? Impossible to tell.Our final point would be to funders, lenders, investors, VCs and family office investors. In the main, secured creditors stand outside of a CVA process which can lead to dilution for preferential and unsecured creditors. What do you have to lose by encouraging your clients or customers to take advice on RESCUE options like CVA first?The CVA team at RMT KSA is made up of creative turnaround advisors, creditor liaison experts, tough debt negotiators, brilliant financial modellers and pragmatic insolvency practitioners. We will always look at rescue and closure options impartially and based upon our professional assessment of viability. Yes many directors come to us liking the CVA option, unfortunately many of these businesses or directors simply don’t have the necessary attributes for a rescue.Now, as a team we have, collectively over 500 company voluntary arrangement deals, built, filed and approved by creditors, we believe we know a fair deal about this rescue tool! Get in touch if your client, customer, investee or your company is interested in leading edge CVA advice. See our expert guide for directors below.DOWNLOAD OUR 69 PAGE GUIDE ON CVAS

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Why We Are Experts At CVAs! Read Our Story

Why Do CVAs Get A Bad Press?

in What is a CVA (Company Voluntary Arrangement)?

It is very simple, when a CVA succeeds very few people hear about it (it doesn't have to be publicized unlike administration or liquidation). The company carries on trading and the debts are paid off over time. If it fails and then the company is put into administration or even liquidated then everyone is up in arms saying that CVAs don't work. This is nonsense!They do work and will, in most cases, pay more back to the creditors than other insolvency procedures. Mind you, for a CVA to work then the business must be viable and have a future so that creditors can be paid off over time. In most cases a CVA fails for the following reasons;The company has agreed to pay more to creditors than it can afford. Creditors have been poorly managed by the advisors and so have not been as supportive of the process as they should. A consensus with creditors should be the aim of the turnaround or insolvency advisors. The company is over optimistic on projected sales. The CVA advisors and management have not gone far enough to cut costs quickly The management have grown tired of being in business and so fall on their sword! Their bank has not been fully involved and although they are not bound by the CVA their advice and input is essential. A CVA was not the best tool for their situation. Perhaps an administration or in some cases a company liquidation would have been more appropriate. Advisors have little experience of CVAs but push ahead nonetheless. See below.Example:  A director came to us wanting to change supervisors of the CVA as it wasn't working.  When we looked into it we discovered that the company had debts of £1.5m on a turnover of £1m.  This immediately sounds unviable! especially as the CVA was to pay 100p in the £1 over 5 years.  To make matters worse, one of the main creditors was Amazon, as they ran an ecommerce site directly linked to Amazon.  So, given that Amazon controlled all the cash they didn't comply with the terms of the CVA and started to take back what was owed to them.  So the IP who proposed the CVA had no idea what a "de facto" secured creditor was.  The IP should have left Amazon out of the CVA and suggested to the other creditors that 100p in the £1 was not possible.  We often get agreed CVAs with payments of 40p in the £1.  Funnily enough the IP who proposed this CVA hasn't done very many!CVAs are becoming ever more popular with big retailers with Poundworld being the most recent large company to consider using one.

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Why Do CVAs Get A Bad Press?

Administration or Company Voluntary Arrangement CVA

in What Does Going Into Administration Mean? What is a CVA (Company Voluntary Arrangement)?

The process of administration is very different from a CVA. In an Administration, Insolvency Practitioners take control of the company where it can be protected from all legal actions by any creditor. In a CVA the directors remain in control and a legally binding agreement is struck with the unsecured creditors to allow it to continue to trade. A CVA is generally a much less expensive process.

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Administration or Company Voluntary Arrangement CVA

Company Voluntary Arrangement For Law Firms

in Law What is a CVA (Company Voluntary Arrangement)?

If your law practice has cashflow problems and pressure is growing, it’s time to get support and advice on your options. Its free to get initial advice from experts in turnaround and insolvency such as RMT KSA who own this website. We have been rescuing, restructuring and closing law firms since 2003. Talking to experts (free) helps you understand this option and you will find it takes a lot of weight off your mind. So how would a CVA help your law practice? A CVA is a legally binding agreement with your LLP’s or company's creditors which allows a proportion of its HMRC and unsecured debts to be paid back over time. A well-structured proposal will ensure that HMRC, banks and other creditors support a restructure of the debts, the costs and the practice. By involving the regulators early, we can ensure they have input and oversight of client file issues and client account issues.Once the proposal has been approved then all unsecured creditors, are bound by the arrangement. The company or LLP can carry on trading as usual, and the directors remain in control. The CVA is monitored by a supervisor, who must be a licensed insolvency practitioner. The arrangement usually lasts for 3-5 years.A CVA is the best UK rescue tool for a company/LLP that could be viable going forward but is burdened by historic debt. The directors or designated members, who remain in control, are able to trade out of their firm’s current financial problems, provided that they have addressed the problems that caused the debts in the first place.This page will help you to discover what a company voluntary arrangement does, understand how it works and how it can help you stop creditor pressure and turnaround your company.If your law firm cashflow is under severe pressure call now. We will help you with the SRA and rescue your business.Call our support centre on 0800 970 0539 for a no obligation confidential chat. Read on to see the benefits of a Company Voluntary Arrangement, and how it can help you. The Advantages of a CVA For Your Law FirmCompany voluntary arrangements can improve cash flow quickly. SRA will support well structured professional CVA proposals and allow you to continue to practice. Stop pressure from HMRC tax, VAT and PAYE while the company voluntary arrangement is being prepared. We deal with HMRC on your behalf. A CVA can stop the threat of a winding up petition from HMRC Costs of overheads, people and buildings can be rapidly cut in a CVA as expensive managers can be made redundant. Company voluntary arrangements can terminate employment, payment/compliance obligations under leases, onerous supply contracts and all with NIL CASH COST All money owed to creditors is bundled up in one monthly payment to the supervisor Remove employees with no redundancy payments of lieu of notice costs (paid by the Government). Board and shareholders or designated member remain in control of the firm. A CVA has much lower costs than administration or a Scheme of Arrangement It is not publicly announced like administration is. Informed client consent is not necessary. You do not have to say your law firm is in a Company Voluntary Arrangement to your customersDisadvantages of a CVA for a law firmThe firm will have no credit rating after the CVA unless a group structure is out in place. The firm may have to find new bank facilities. SRA will want regular reporting of the progress to entering CVA and beyond. PII may be more expensive.CVA is a much more palatable solution than SRA intervention. Administration or pre pack administration, BUT it is tough process to go through. YOU need to be prepared to change the business practices to focus on profitability to ensure the CVA will perform over time. Creative corporate structure planning will be part of the advice we will give your firm. We practice as a partnership? Please note that if your firm is an ordinary partnership most of the above applies, but it is likely a partnership voluntary arrangement would be the process we would advise you upon.However, in advance of any meeting and issuance of engagement  letters our regulators and the Insolvency Service (part of HM Department of Business Energy and Industrial Strategy) require all insolvency practitioners to obtain know your client (KYC) and anti-money laundering (AML) identification documents for all directors and shareholders holding >25% of the shares to allow us to proceed to advise the company. We will require up to date ID information including a photographic ID, such as a passport or driving licence PLUS a home utility bill or bank statement for each person.

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Company Voluntary Arrangement For Law Firms

Landlords Settle Case Against New Look’s CVA Before Court of Appeal

in News Property and Real Estate Retail What is a CVA (Company Voluntary Arrangement)?

3 March 2022New Look's landlords have just announced that they have settled with the company on the day before a crucial hearing at the Court of Appeal.17 May 2021New Look Landlords have been granted leave to appeal to the Supreme Court over their treatment in the CVA.Yet again the High Court has upheld the power of the CVA mechanism as a way of ensuring that a company can survive if the majority of its creditors (by value) agree to allow it time to get back on its feet.  Landlords feel that it is unfair but if it is not to be the creditors who else?  A panel of "experts"?  A quango?  The Government?Landlords complained that the switch to turnover rent “fundamentally rewrites” leasing agreements.  Unfortunately, when a company becomes insolvent and, in the case of administration, all contracts are "rewritten".There is a shift in the balance of power between landlords and tenants given the loss of footfall on the High Street and the rise of online shopping recently.  However, if everyone rushes back to the shops, post pandemic, maybe the landlords will be able to take a share on the increased turnover?17 March 2021It has been reported that New Look has entered a High Court battle with two of its landlords; British Land and Land Securities, over its proposed restructuring plans.In total, there were four landlords who challenged the CVA which involved switching stores to turnover based rents.The argument is that switching to turnover rents ‘’fundamentally rewrites’’ leasing agreements and deems the payments of arrears as ‘’unfair’’.10th November 2020New Look announce completion of its refinancing scheme which included a debt-for-equity swap to reduce debt from £500m to £100m and a £40m cash injection.The refinancing scheme was first mentioned in August, at the same time as its (now approved) CVA was first announced.CEO, Nigel Oddy said: “I would like to thank our banks, bondholders, landlords and creditors for their support during our financial recapitalisation process and CVA. Completion of the transaction today means we now have significantly enhanced financial strength and flexibility, and a sustainable platform for future trading and investment. Looking ahead, notwithstanding the challenging market conditions, we are focused on delivering our strategy to enhance our position as a leading convenient broad appeal fashion destination''.2nd November 2020It has been reported that 2 landlords, British Land and Land Securities have challenged New Look's CVA casting doubt on the company's ability to survive.  The new lockdown will hit New Look hard as they only have a small proportion of their sales online (20%). Challenges against CVAs have not been successful in the past.5th September 2020In an unexpected outcome - New Look's creditors have approved its CVA proposals when put to a vote today. Creditors approved with a 75% majority vote in favour.The CVA features no store closures and saves all 11,000+ jobs. It looks to move more than 400 of its UK stores to turnover-based rental models, have an enhanced landlord break clause, and a three-year rent holiday on its 68 remaining stores.14th September 2020British Land, a landlord of New Look, owning 19 of its stores, plans to oppose its CVA proposal laid down to vote on tomorrow. Landsec, of whom own 10 stores also are believed to oppose as are Hammerson.The possibility that New Look's biggest landlords will vote against the plan, does not appear good for the retailer. Its chance of survival is thrown further into red.What will the outcome be tomorrow?6th September 2020It is not looking promising for New Look since around ten of its landlords have been reported to of rejected its CVA proposals, to be voted on by creditors in the next 9 days. Can the table still turn? Or is liquidation coming even more unavoidable now?26th August 2020New Look has announced it has reached an agreement with its financial creditors. This involves investing £40m in new capital and ''significantly de-leveraging'' its balance sheet. The group expect this to be complete on or before 31 October 2020.The company has also announced that it is launching a CVA, so asking landlords to accept new turnover-based leases across its portfolio.The fashion retailer also said it is launching a debt-for-equity swap on its current debts, looking to lower those from £550m to £100m.The British Property Federation have criticised the CVA proposal due to ''inaccuracies''.Drapers report more.10 August 2020According to This is Money, New Look is reported to be considering a company voluntary arrangment (CVA) since it looks to switch to turnover-based rents.Advisors from Deloitte are expected to be appointed as soon as this week.If a CVA is used, this would not be the first time for the company. The retailer used one in 2018 when landlords voted in its favour as it was used to improve the operational performance of the company.01 July 2020It is reported that New Look has given an ultimatum to landlords; trying to reach an agreement to move to turnover-based rents for its 500-strong store estate.Consultancy firm, CBRE, have been hired to help with the process. If discussions with landlords are not successful, likelihood of the retailer falling into a pre-pack administration is high.If a pre-pack is used, this would be the second financial restructuring it has undergone in less than two years, after its debt-for-equity swap with stakeholders in January 2019. At this last restructuring, New Look moved onto monthly rents for most of its portfolio and asked for rent holidays for some of its stores.Talks with landlords have been happening for most of the month though concern rises that some will block the proposal.A pre-pack has been discussed and is ‘’the last thing it wants.’’A spokesperson said, ‘’We are committed to seeking a consensual agreement with landlords to move to turnover rents, and work in partnership with them as we continue to navigate these increbily challenging and uncertain times together.’’The retailer employs 12,000 people across its UK and Ireland business.New Look are not the first to look at a move to turnover rents amid the covid-19 pandemic. Frasers Group are the latest to be looking at doing so. Other retailers have appointed administrators as a result of the pandemic: Debenhams, Laura Ashley, Cath Kidston. Some have also refused to pay March quarterly rents.

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Landlords Settle Case Against New Look’s CVA Before Court of Appeal