Q&As

If a lender makes a loan to a company in a company voluntary arrangement (CVA) which is secured by way of a legal charge, can the lender then rely on the existing CVA as an insolvency event of default in order to enforce the security a few weeks later?

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Published on LexisPSL on 29/07/2019

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • If a lender makes a loan to a company in a company voluntary arrangement (CVA) which is secured by way of a legal charge, can the lender then rely on the existing CVA as an insolvency event of default in order to enforce the security a few weeks later?

If a lender makes a loan to a company in a company voluntary arrangement (CVA) which is secured by way of a legal charge, can the lender then rely on the existing CVA as an insolvency event of default in order to enforce the security a few weeks later?

In order for a secured lender to appoint, ordinarily, an event of default has to have occurred under the terms of the loan facility and/or associated debenture.

In this scenario, the

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