CVA (Company Voluntary Arrangement)

A Company Voluntary Arrangement (CVA) is a strategic formal agreement between a solvent company and its creditors to restructure its debt. It allows the company to agree on new payment terms, such as reduced payments or extended terms, enabling it to avoid insolvency or bankruptcy. The CVA is negotiated with creditors and overseen by a licensed insolvency practitioner, providing a controlled way for the business to maintain operations while managing financial difficulties. If approved by the majority of creditors, the company commits to the arrangement, providing it with a chance to stabilize and regain profitability.