Voluntary arrangement of general partnerships
Produced in partnership with Phillip Patterson of Hardwicke Chambers
Voluntary arrangement of general partnerships

The following Restructuring & Insolvency practice note produced in partnership with Phillip Patterson of Hardwicke Chambers provides comprehensive and up to date legal information covering:

  • Voluntary arrangement of general partnerships
  • Applicable legislation
  • Who may propose a PVA?
  • Nominee
  • Moratorium
  • Procedure for applying for a PVA
  • Challenging the PVA
  • Supervisor’s powers
  • Obligations of supervisor
  • Completion or termination of the PVA

Voluntary arrangement of general partnerships

In addition to the better-known company voluntary arrangements (CVAs) and individual voluntary arrangements (IVAs), the insolvency legislation permits insolvent general partnerships to enter into compromise arrangements with their creditors. These are known as partnership voluntary arrangements (PVAs). When contemplating such a compromise, however, partners must bear in mind that they are personally liable in full for the debts of the partnership. It is, therefore, advisable in most, if not all instances, for the partners to enter into IVAs to fully protect their interests.

Applicable legislation

Part II of the Insolvent Partnership Order 1994 (SI 1994/2421) (IPO 1994) as amended by the Insolvent Partnership (Amendment) (No 2) Order 2002 (SI 2002/2708) applies the provisions of Part I of the Insolvency Act 1986 (IA 1986) on CVAs to insolvent partnerships by means of a PVA) (IA 1986, s 420).

The IPO 1994, SI 1994/2421 also applies the provisions of what was IA 1986, Sch A1 to insolvent partnerships with amendments, enabling use of the moratorium procedure. IA 1986, Sch A1 (along with IA 1986, s 1A) was repealed by paragraphs 2 and 30 of Schedule 3 to the Corporate Insolvency and Governance Act 2020 (CIGA) 2020. However, save for a minor amendment to article 4, CIGA 2020 did not amend the IPO 1994, SI 1994/2421 nor the Insolvent Partnerships (Amendment) (No 2) Order 2002. The

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