CVAs—landlord issues and remedies

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • CVAs—landlord issues and remedies
  • What is a CVA?
  • Why are CVAs relevant to landlords?
  • What are the issues for landlords?
  • Is the CVA binding on landlords?
  • The position in respect of arrears of rent and future rents
  • The effect the CVA will have on guarantees
  • Can a landlord challenge a CVA?
  • How to vote in a CVA
  • Practical advice for landlords

CVAs—landlord issues and remedies

What is a CVA?

A company voluntary arrangement (CVA) is an arrangement between a company and its creditors, supervised by an IP (who is known as the supervisor once the arrangement become effective), sanctioned by the court and in compromise for the company's debts. For further reading on CVAs, the steps to implement them and their effect, see: Company voluntary arrangements—overview and the Practice Notes: In what circumstances can a CVA be proposed and by whom? and The process and effect of approval of a company voluntary arrangement (CVA): the position under the Insolvency (England and Wales) Rules 2016.

A CVA is normally proposed by the company's directors (but can be proposed by its administrator or liquidator) and its aim is to make a compromise in satisfaction of its debts, or have a scheme of arrangement of its affairs.

For a consideration of the property law aspects of a CVA, see Practice Note: Property law aspects of Company Voluntary Arrangements (CVAs).

Why are CVAs relevant to landlords?

The use of CVAs for companies with large property portfolios has increased in recent times as a CVA offers a mechanism that allows the tenant company (with creditor consent) to restructure its rent obligations on a mass scale, without the need to negotiate with each individual landlord. Such a CVA can significantly reduce the rent overheads of a company

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