PART 2COMPANY VOLUNTARY ARRANGEMENTS (CVA)
CHAPTER 2The proposal for a CVA (section 1)
[Note: (1) section 1 of the Act sets out who may propose a CVA;
(2) a document required by the Act or these Rules must also contain the standard contents set out in Part 1.]
Proposal for a CVA: general principles and amendment2.2
1
A proposal must—
a
contain identification details for the company;
b
explain why the proposer thinks a CVA is desirable;
c
explain why the creditors are expected to agree to a CVA; and
d
be authenticated and dated by the proposer.
2
The proposal may be amended with the nominee’s agreement in writing in the following cases.
3
The first case is where—
a
no steps have been taken to obtain a moratorium;
b
the nominee is not the liquidator or administrator of the company; and
c
the nominee’s report has not been filed with the court under section 2(2).
4
The second case is where—
a
the proposal is made with a view to obtaining a moratorium; and
b
the nominee’s statement under paragraph 6(2) of Schedule A1 (nominee’s opinion on prospects of CVA being approved etc.) has not yet been submitted to the directors.
Proposal: contents2.3
1
The proposal must set out the following so far as known to the proposer—
Assets |
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Liabilities |
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Nominee’s fees and expenses |
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Supervisor |
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Guarantees and proposed guarantees |
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Timing |
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Type of proceedings |
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Conduct of the business |
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Further credit facilities |
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Handling of funds arising |
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Address (where moratorium proposed) |
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Other matters |
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2
Where the proposal is made by the directors, an estimate so far as known to them of—
a
the value of the prescribed part if the proposal for the CVA is not accepted and the company goes into liquidation (whether or not the liquidator might be required under section 176A to make the prescribed part available for the satisfaction of unsecured debts); and
b
the value of the company’s net property (as defined by section 176A(6)) on the date that the estimate is made.
3
Where the proposal is made by the administrator or liquidator the following so far as known to the office-holder—
a
an estimate of—
i
the value of the prescribed part (whether or not the administrator or liquidator might be required under section 176A to make the prescribed part available for the satisfaction of unsecured debts), and
ii
the value of the company’s net property (as defined by section 176A(6)); and
b
a statement as to whether the administrator or liquidator proposes to make an application to the court under section 176A(5) and if so the reasons for the application; and
c
details of the nature and amount of the company’s preferential creditors.
4
Information may be excluded from an estimate under paragraph (2) or (3)(a) if the inclusion of the information could seriously prejudice the commercial interests of the company.
5
If the exclusion of such information affects the calculation of the estimate, the proposal must include a statement to that effect.