What is a CVA?
A CVA is a formal insolvency procedure for a limited company in the UK where directors get to retain control of the company.
A CVA is usually used as an alternative to liquidation
In a nutshell a CVA is an agreement between a company and its creditors which is legally binding and approved via the court.
More often than not the company proposes to pay its creditors a better return than the sum they would get in liquidation but over much longer period of time.
If creditors accept the proposed CVA then a line is effectively drawn and all the old liabilities are frozen.
The company then continues to trade under the control of the directors but must pay for its on-going supplies and liabilities.