CVA Client Requirements Post Engagement

10 August 2017

A guide to what you need to do after appointing KSA Group

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What should you do when problems arise, why do KSA need lots of information? 
Please read this guide and refer to it as necessary.

Action

Why is this needed?

When/ by whom?

Legal Actions

 

 

 

You must inform KSA at once if any legal actions have been taken (or are threatened) by any creditor.

 

Please ensure that we receive all:

 

County Court Summonses

County Court Judgments

Warrants

Walking Possession or seizure notices

High Court Writs

Winding up Petitions

 

Additionally please ensure that we get all lead documents, threatening letters and claims forms.

 

Directors, as soon as they sign engagement letter.

 

 

 

Please also ensure that we are informed of any activity of this nature during the course of the CVA preparation.

 

 

 

 

 

 

Note: Even a vague threat by letter, voice or email should be passed to us.

 

 

 

Sheriffs & Bailiffs

When we are appointed we always tell clients to lock all access doors and windows if ANY legal threats have been made. In more than 75% of cases they do NOT listen!

 

We regularly have to deal with Sheriffs and bailiffs entering and seizing goods and assets. They can remove goods, property and cause lots of problems, but, they cannot forcibly obtain entry.

 

Ensure that the doors are locked!

Instruction from directors that all doors and windows must be secured in business hours. As soon as KSA is appointed.

 

Please inform us at once of any activity of this nature during the course of the CVA preparation.

 

Note: If it seems impossible to lock the door: remember once the bailiff or Sheriff is over the threshold you cannot prevent him taking action.

 

 

 

Retention of Title (ROT)

Many creditors will try to claim ROT; many do not have adequate grounds for claiming ROT.

 

Please inform us of ANY claims; please do not enter into any “deals” to make payment or allow ROT without talking to Iain Campbell.

All directors with purchasing or accounting/ admin. Please inform us immediately any creditor makes a ROT claim/ statement.

 

 

 

Completing the SOFI

(Schedule of Information)

The Schedule Of Information is a carefully compiled list of the information that we need to collect to enable us to prepare an accurate CVA proposal. ALL information requested is needed, so please do not merely answer no because you do not think it will be necessary. If you need guidance on this please call us. Be aware delays in obtaining all information  leads to a delay in getting

 the CVA finished.

 

We will pressurise you into getting all information so please try to collate everything we ask for.

Person with responsibility for the collation, administrative team or financial team.

 

Please collect as much as possible as quickly as possible, but do not hold back delivery for the odd document.  The delivery of the 80-90% that most clients find quickly allows our corporate advice team to get started.

Leases

We must see ALL LEASES. Although you might think that payments are up to date therefore, the lessor is not a creditor; well they are contingent creditors and we MUST see all leases.

Person with responsibility for the collation, administrative team or financial team.

 

HPs

We must see ALL HP agreements. Although you might think that payments are up to date therefore the finance company is not a creditor: well they are contingent creditors and we MUST see all HP agreements

Person with responsibility for the collation, administrative team or financial team.

 

Direct Debits

Please provide a list of DD’s Standing orders and etc with a list of reasons for payments.

Person with responsibility for the collation, administrative team or financial team.

 

 

 

 

Bank Statements

Please provide at least 3 months copies of bank statements.

Person with responsibility for the collation, administrative team or financial team.

 

 

 

 

Employees Details

All employee details MUST be supplied. All employees are contingent creditors and we must calculate their claims as if the company was proposing liquidation.


We cannot do that without all of the employee information on the SOFI sheet.

Person with responsibility for the collation, administrative team or financial team.

 

 

 

 

Cash Management

 

 

Payments to Creditors

Almost every client has worries about the creditors and whether to pay them or not. Part of our job is to protect your cashflow and to prevent illegal payments.

 

Please do not pay any creditor without discussing it with your case manager first.

 

It is vital to protect cashflow now, all creditors will supply going forward on pro-forma. So not paying for historic debt will reserve your cashflows.

 

If there are good reasons for payment (i.e. a ransom creditor) then payment will probably have to be made but the CVA proposal document will describe the reasons why some payments have been made. That will ensure that all creditors are aware of payments to (unnamed) creditors and effectively approve those payments.

Person with responsibility for the collation, administrative team or financial team.

 

The directors should consider all payment issues with the case manager at KSA, before making any payment.

 

 

 

90 Day Cashflow

We recommend production of a 90 day, day by day cashflow. We can provide the spreadsheet model for this. Please ask Iain Campbell.

 

 

Please prepare with all known receipts and forecast all known payments.

 

Please update each day or two to keep tabs on the cashflow.

Person with responsibility for the administration of financial team.

Please prepare as soon as possible and send to KSA.

 

We will then review and amend and remove all payments that are unnecessary

 

Payments to DDs

Please insert into the cashflow, we will determine which payments are necessary or not necessary

Person with responsibility for the collation, administrative team or financial team.

 

 

 

 

HMRC

No payments will be made to the IR or VAT for historical debt during the period of the CVA.  Please forward all correspondence received from the Crown agents.

 

Additionally forward any claims, surcharge notices, letters or legal actions immediately they are received during the (CVA) preparatory period.

Person with responsibility for the collation, administrative team or financial team.

 

 

 

 

 Landlord

Landlords have very specific powers and we must have copies of all leases, rental licences, service charges, rental deposit deeds, landlord’s waivers, legal actions from the landlord.

 

If any documents are received during the (CVA preparatory period please fax them to your case manager.

 

KSA will generally work with the directors to reach an agreement with the landlord about continued occupation or otherwise.

Directors, or person with responsibility for the collation, administrative team or financial team.

 

Insurances

All insurances must be continued. If any doubts or unusual payments please contact your case manager. Please copy all policies to us.

Person with responsibility for the collation, administrative team or financial team

 

 

 

Suppliers with Credit Insurance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If in Any Doubt?

The CVA is normally a qualifying event for a supplier with credit insurance to make a claim to the insurance company for the amount to be bound by the CVA.

 

However, if you intend to continue trading with this supplier then it will be necessary for your supplier to request and obtain a “salvage waiver” which allows any future supply of any goods and services to your company to be supplied (normally on a pro forma basis) and confirms that remittance of payment for these future supplies of goods and services do not get allocated to historical debt.

 

 

This is a very difficult period for you and your team, but we need to receive all details above and those included in the SOFI to allow full high quality preparation of your company’s CVA.

 

Inevitably you will not be able to locate  everything immediately, but please do keep in pursuit of copies from accountants, lawyers and advisors. Please be in touch if documents are missing.

If you are aware that your supplier holds credit insurance over any liability owed by your company and you intend to continue trading with this supplier then ensure that the supplier obtains a “salvage waiver” from the insurance company before proceeding with any future supply of goods and/or services.

 

Our Standard creditor letter will include a paragraph informing the supplier of the need to obtain the “salvage waiver”, if applicable.

 

All directors and person with responsibility for the collation, administrative team or financial team.

 

Finally:

 

We are here to help and we deal with these issues all day and every day. Please, always ask us for help whenever a decision needs to be made and you are worried what impact that decision may have on the CVA, or vice versa.

 

Categories: CVA, What is a CVA or Company voluntary arrangement?

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