Challenging an individual voluntary arrangement (IVA)
Produced in partnership with Tom Shepherd of 4 New Square and Paul Allen of FRP Advisory LLP
Challenging an individual voluntary arrangement (IVA)

The following Restructuring & Insolvency guidance note Produced in partnership with Tom Shepherd of 4 New Square and Paul Allen of FRP Advisory LLP provides comprehensive and up to date legal information covering:

  • Challenging an individual voluntary arrangement (IVA)
  • Coronavirus (COVID-19)
  • Grounds to challenge an individual voluntary arrangement
  • Entitlement to challenge an IVA
  • Time limit to challenge an IVA
  • Ground (a): unfair prejudice
  • Ground (b): material irregularity
  • Powers of the court on a challenge to an IVA

Grounds to challenge an individual voluntary arrangement

An application can be made to challenge the approval of an individual voluntary arrangement (IVA) on one or both of two grounds:

  1. that the creditors’ decision approving the IVA unfairly prejudices the interests of a creditor of the debtor

  2. that there has been some material irregularity at or in relation to the creditors' decision procedure

Entitlement to challenge an IVA

A creditor is entitled to challenge an IVA if they:

  1. were entitled to vote in the creditors' decision procedure, or

  2. would have been entitled had they had notice of the creditors' decision procedure

A challenge to an IVA may only be pursued in accordance with the statutory scheme.

Time limit to challenge an IVA

An application to challenge an IVA may not be made:

  1. after the end of the period of 28 days beginning with:

    1. where an interim order (IO) was made under section 252 of the Insolvency Act 1986 (IA 1986), the date on which the nominee reported to the court under IA 1986, s 259(1)(b) the decision of the creditors, or

    2. where no IO was made, the date on which the creditors decided whether to approve the IVA proposal

  2. in the case of a creditor who was not given notice of the creditors' decision procedure, after the end of