Partnership Simultaneous Individual Voluntary Arrangements (SIMIVAs)
Basically as the title suggest the mechanism is to link together a number of simultaneous individual voluntary arrangements to protect the partnership and the individual debtors. It allows the partnership arrangement to deal with partnership debts and individual arrangements to deal with any individual debts. It also protects the individual partners from the "fallout" of the partnership debts to the individual.
If the partners believe in the fundamental viability of the business and are determined to fight for the business to help survival then a rescue mechanism exists that can be a powerful tool or framework for the restructuring of the business.
It must be understood that this mechanism is not easy; the partners must be prepared to prove viability of the business and to reveal their personal financial affairs to their creditors. Above all the partners need to be determined and united to make this technique work
Please see our SIMIVA flowchart or frequently asked questions guide page for more information.
So what is an individual voluntary arrangement (or IVA)?
An IVA, simply, is a formal deal between the individual (who is in debt) and the business or person who is owed money, known as a creditor.
If the individual cannot pay off debt when payments fall due, he or she is insolvent. Likewise if a partnership is suffering with cashflow, a SIMIVA may be the best option.
Going into an IVA or SIMIVA can help the individual as well as the partnership get out of debt over a number of years. It also gives the business the opportunity to restructure and re-evaluate strategies.
Who should use a SIMIVA or Interlocking IVAs?
A SIMIVA can only be used when the partnership business is viable or where disposable assets can be turned readily into cash. If the business isn't viable it should be wound up (see winding up the partnership) as soon as possible and individual bankruptcy initiated if required.
For more information, read out detailed guide (including a step by step process) to IVAs. Alternatively, call us on 08009700539 for advice on your specific circumstances.
SIMIVAs - how do they work?
The experienced turnaround advisor or IP will ensure that all work is done simultaneously and that the proposals are interlinked. Simple explanations for the creditors and debtors will be necessary. Creditors meetings will be held at the same time and the votes that are necessary as above will be cast for each proposal.
Effectively the partnership deal sits as a raft atop the two or more individual debtors VAs
This is complex stuff, get good advice! Call us now on 08009700539
Worried about poor cashflow? Covid-19?, How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539
Please note that the guide was mostly written pre Covid-19 and there have been some changes to insolvency legislation that limits creditors actions and relaxes rules regarding wrongful trading. A new 20 day moratorium for distressed businesses has also been introduced.