Effect of a moratorium in a company voluntary arrangement (CVA) on creditors and the company [ARCHIVED]
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 [ARCHIVED]

The following Restructuring & Insolvency practice 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 [ARCHIVED]
  • WARNING:
  • The effect of the moratorium on creditors, the company and others
  • Effect on the Company
  • The effect of a breach of the moratorium provisions

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).

WARNING:

This Practice Note reflects the position maintained up to 25 June 2020 before the coming into force of the Corporate Insolvency and Governance Act 2020 (CIGA 2020), and is for historic purposes only. It will not be updated in respect of any new case law or developments. The Corporate Insolvency and Governance Act 2020 (CIGA 2020), now enacted, abolishes the moratorium procedure for small companies under Schedule A1 to the Insolvency Act 1986 (IA 1986), to make way for the new standalone moratorium procedure. For further details, see Practice Notes: Corporate Insolvency and Governance Act 2020—impact on CVAs and Corporate Insolvency and Governance Act 2020—moratorium.

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

During the period for

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