Property law aspects of Company Voluntary Arrangements (CVAs)
Produced in partnership with Matthew Ditchburn and Tim Reid of Hogan Lovells International LLP
Practice notesProperty law aspects of Company Voluntary Arrangements (CVAs)
Produced in partnership with Matthew Ditchburn and Tim Reid of Hogan Lovells International LLP
Practice notes
What is a CVA?
A company voluntary arrangement (CVA) is an insolvency process that allows a company to enter into a contractual agreement with creditors to settle its unsecured debts or come to an arrangement with them over its affairs. The company's directors continue to operate the business, subject to the supervision of an insolvency practitioner.
Retailers in particular with large property portfolios often use so-called ‘landlord CVAs’ to restructure their rental obligations and close unprofitable stores. This note explains how property law and landlord and tenant issues may arise under such a CVA.
This note identifies provisions which are commonly found in CVAs and explains how they may operate in practice. However, each CVA will differ depending on the exact terms of the proposal. It is therefore essential to review the CVA proposal carefully to establish its impact on creditors.
This note does not provide detailed information on the mechanics of approving and implementing a CVA. For Practice Notes which deal with the CVA procedure, see:
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Company voluntary arrangement definition
What does Company voluntary arrangement mean?
An alternative to an insolvent liquidation, whether a creditors' voluntary winding up or a compulsory winding up, whereby a company enters into a binding arrangement with its creditors to compromise its debts.
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