CVAs and Landlords
"CVAs allow troubled companies to escape their full obligations", say landlords and other critics, according to Accountancy Age.
Such a perspective ought not to be surprising because the whole point of a CVA is to relieve the company of obligations it cannot meet - on fair terms.
The principles are that a company and its creditors are free to agree whatever they like in a CVA, provided, broadly, that 75% of those creditors who vote do in fact support the proposals and that no creditors are unfairly prejudiced.
Landlords in particular should recognise that accepting a compromise on future income and/or outstanding debt can be preferable to the loss of value to creditors on liquidation, with the consequential absence of future income (voids) and outstanding debt (unpaid rent).
Date: 23rd March, 2010
Articles from this Author
1st November, 2018
Budget 2018 - HMRC preferred creditor in insolvency
23rd March, 2018
20th July, 2017
Recast European Insolvency Regulation
26th June, 2017
The Recast European Insolvency Regulation (the “Recast EIR”)
Contact a Partner
For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole