Phil MeekinView Profile
What do Store Twenty One, Travelodge, Mamas & Papas, L A Fitness, Fitness First, Bella Italia, JJB Sports, Blacks and Café Rouge have in common? They are all well-known brands which over the past few years have entered a Company Voluntary Arrangement (CVA) steering them through choppy waters with varying degrees of success. Their activities are largely in the retail and hospitality sectors.
Company Voluntary Arrangement (CVA) is a procedure which allows a financially troubled company to reach a legally binding agreement with its unsecured creditors about payment of all or part of its debts over an agreed period of time steering them back to success. It is only one of a number of measures which can help address financial problems.
The arrangement often enables a company to reduce its overheads significantly and in a short time scale.
CVAs are particularly popular in the retail sector or with companies which have large property portfolios. If a company is tied into historically high rents and suffers a significant drop in sales, the business model may no longer be viable. Part of a CVA proposal may be to renegotiate those rents.
Unlike other insolvency procedures, the directors remain in control of the day-to-day operations of the company.
|Store||Period in CVA||Website|
|Store Twenty One||July 2016||storetwentyone.co.uk/|
|Mamas & Papas||September 2014||mamasandpapas.com|
| Fitness First||June 2012||fitnessfirst.co.uk|
| Bella Italia||June 2014||bellaitalia.co.uk|
| JJB Sport||April 2009 & March 2011||jjbsports.com|
|Café Rouge||June 2014||caferouge.com|
A fundamental feature of any CVA proposal is that the company makes a regular payment which it can afford (based on financial projections) and that payment is divided amongst creditors on a pro rata basis.
In theory that gives the company breathing space to enable it to trade out of its difficulties. It gives it time – time to put together a new business plan, time to restructure finances, time to recover after suffering a bad debt, time to finish a profitable contract, time to sell assets. And time is of the essence – taking prompt advice can make the difference between survival and failure.
A CVA needs determined directors and the co-operation of creditors and can only be arranged with the help of a licensed insolvency practitioner.
At Wilson Field we have a team of licensed insolvency practitioners and skilled advisers to help turn around businesses steering them in the right direction. They have a wide range of experience from backgrounds in accountancy, business, insolvency and banking. If you would like a confidential, no-obligation chat about your business speak to one our friendly advisers on the number below.