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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
Author: Chris Laughton


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