A CVA is a legally binding agreement between a company and it’s creditors to allow for all or a percentage of its debts to be paid back over time. 75% of the creditors, by value, who voted on the company’s proposal are required to vote in favour for the CVA to be approved.
Once the proposal has been approved then all unsecured creditors are bound by the arrangement. The arrangement can provide that the company carry on trading and the directors remain in control. The CVA is monitored by the supervisor who has to be a licensed insolvency practitioner.