Effect of a moratorium in a company voluntary arrangement (CVA) on creditors and the company
Produced in partnership with Lexa Hilliard QC of Wilberforce Chambers
Effect of a moratorium in a company voluntary arrangement (CVA) on creditors and the company

The following Restructuring & Insolvency guidance note Produced in partnership with Lexa Hilliard QC of Wilberforce Chambers provides comprehensive and up to date legal information covering:

  • Effect of a moratorium in a company voluntary arrangement (CVA) on creditors and the company
  • The effect of the moratorium on creditors, the company and others

The Court of Appeal has made it clear in JCAM that a moratorium cannot be obtained through the back door by filing a notice of intention to appoint an administrator on the basis that is one of the other options being considered; a clear intention to appoint an administrator, not just a possibility is required. Companies seeking re-financing or proposing company voluntary arrangements (CVA) cannot file an NoI to achieve a moratorium while they try to rescue the company in other ways. For further details, see News Analysis: The practice of filing a notice of intention (JCAM Commercial Real Estate Property XV Ltd v Davis Haulage Ltd).

The effect of the moratorium on creditors, the company and others

During the period for which a moratorium is in force for a company:

  1. no petition may be presented for the winding up of the company other than an excepted petition. An excepted petition is a petition under:

    1. the Insolvency Act 1986, IA 1986, s 124A (winding up on grounds of public interest) or IA 1986, s 124B

    2. the Financial Services Act 1986, s 72(1)(b) (just and equitable petition following petition by Secretary of State) (note this act has now been repealed)

    3. the Banking Act 1987, s 92(1)(b) (just and equitable petition) (note this act has now been repealed)

    4. the Financial Services