• A snapshot of company voluntary arrangements: success, failure and proposals for reform

      Walton, Peter; Umfreville, Christopher; Jacobs, Lezelle (Wiley, 2020-06-24)
      The Company Voluntary Arrangement (“CVA”), introduced by the Insolvency Act 1986, was born out of the Cork Committee, which in 1982 identified the need for a simple procedure where the will of the majority of creditors in agreeing to a debt arrangement could be made binding on an unwilling minority.1 Despite the availability of this flexible restructuring tool for over three decades, the frequency of CVAs is reasonably low when compared with alternative corporate Insolvency Act 1986 procedures and it has been commented that CVAs have a high failure rate.2 The CVA has risen to prominence recently with a number of highprofile cases drawing media attention and, at times, creditor criticism.3 It is in this context that the authors were commissioned by R3, the Association of Business Recovery Professionals, and the ICAEW, to consider the reasons for the ‘success’ or ‘failure’ of CVAs and investigate the outcomes where CVAs fail. The aim of the project was to identify key characteristics which will allow practical guidance to be provided to insolvency practitioners (“IPs”) and also inform policy recommendations to Government. This led to the publication in May 2018 of Company Voluntary Arrangements: Evaluating Success and Failure (“the Report”).4 This paper represents a summary of the key findings of the Report.