Varying the CVA after creditors’ approval
Produced in partnership with Lexa Hilliard QC of Wilberforce Chambers

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:

  • Varying the CVA after creditors’ approval
  • Power to vary a CVA
  • Who can apply to vary the CVA?
  • Example wording: minor variations
  • Example wording: major variations
  • Practical steps
  • Challenging the variation

Varying the CVA after creditors’ approval

Power to vary a CVA

A power to vary a company voluntary arrangement (CVA) is normally included so that, if circumstances change or minor amendments need to be made, the CVA can be amended without the need to terminate it early. This provides a less drastic option for creditors, as the CVA itself may often state that early termination will require the supervisor to petition for administration or a winding-up order.

There is very little statutory guidance on how a CVA can be varied. A supervisor may apply to court for directions, or any creditor or any other person may apply to the court to challenge any act, omission or decision of the supervisor. However, there is no explicit process in statute to alter or vary the CVA once approved.

It appears that the court has no power to vary the terms of the arrangement (see Re: Alpa Lighting Ltd).

SIP 3.2 refers to any variation being appropriately approved by creditors.

In principle, if no power to vary the CVA is included in the approved CVA proposal, it cannot be varied. In practice, even where there is no power included, directions can be sought to consult creditors to vote on the variation. However, it is likely that without a power to vary, the unanimous consent of the creditors would be

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