By Ian Weatherall, Turon Miah, Louise Kellaway
There has been a series of high profile tenant company voluntary arrangements (CVAs), particularly in the retail and casual dining sectors. Many landlords have been hit by closure of underperforming stores, and by rent cuts on those remaining open. Here we outline ten points for landlords on what CVAs are, how they are entered into and what landlords can do to protect themselves.
WHAT IS A CVA?
A CVA is a statutory process, supervised by an insolvency practitioner. It allows a company in financial difficulty to:
– settle its unsecured debts by only paying a proportion of the amount due; and
– to come to an arrangement with its creditors about the payments of its debts.
It can be used on its own, or in conjunction with another insolvency process, such as administration.