Your finance and business Q&As answered by Darren Bowman, Restructuring and Insolvency Director at Baker Tilly Mooney Moore

Last week I received a Company Voluntary Arrangement proposal from a customer who owes my business money. What does it mean and what should I do?

A Company Voluntary Arrangement (CVA) is a formal insolvency process that allows a company to reach an agreement with its creditors. It should provide both the company and its creditors with a better outcome than liquidation.

The documentation that you have received from the insolvency firm assisting the company should include:

The proposal – outlining the likely amount that you could receive and the timeframe for receiving it
Notice of the time and venue of the meeting of creditors to consider the proposal
A proxy form to enable creditors to vote in favour or against the proposal
A proof of debt or claim form for you to confirm how much you are owed.

You should review the proposal and if you have any questions about it, you should contact the insolvency practitioner as soon as possible. They should be in a position to provide clarification prior to the meeting.

You can attend the meeting of creditors in person by submitting the proxy and claim form, or, if you don’t wish to attend, you can still vote by nominating the chairman of the meeting.

You can vote to accept the proposal put forward, propose modifications or improvements, vote to reject the proposal or abstain from voting entirely.

For the CVA to be approved, over 75% of the voting creditors, by value, must vote in acceptance.

Whether you intend to vote or not, you should submit your claim form, together with any documentation proving the amount due, in order that you can receive a dividend if approved.

Find out more about Baker Tilly Mooney Moore – visit www.bakertillymooneymoore.co.uk