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As licensed insolvency practitioners, we do not require our clients to make any upfront payments when we assist them with a company voluntary arrangement (CVA). If, after considering the options a company decides to implement a CVA, once the insolvency practitioner is appointed and the CVA is up and running the following changes will apply.
Fees for CVA Preparation
Prior to a CVA being proposed to the company’s creditors, there is a considerable amount of preparation work that needs to be conducted. This work includes the preparation of the CVA proposal which will be done with the help of the company’s directors.
The proposal will include (but is not limited to):
- Cash flow projections.
- Creditor list with up to date balances.
- Asset list and estimated valuations.
There is no upfront fee for Wilson Field to help the directors with the preparation of the CVA proposal and to book the creditors meeting.
A nominee is the name given to an Insolvency Practitioner (IP) that is engaged by a company to propose a CVA to its creditors. The fee is not payable until the IP is officially appointed at the meeting of creditors. The fee is decided upon, on a case-by-case basis but the fee will be capped and creditors will need to agree. It is important to note that the Nominee fee is deducted from the company’s CVA monthly payments so is effectively paid for by the creditors.
This cost covers the work carried out by the IP in negotiating the CVA proposal with creditors. It includes the liaison with the likes of HMRC, arranging the creditor’s meeting, and the CVA proposal document preparation, as well as communicating with creditors on any requested queries, concerns or modifications.
Once appointed the IP role becomes that of a ‘supervisor’ of the CVA for the duration of the CVA procedure. The supervisor’s fee is worked out on a case by case basis in a similar manner to the nominee’s fee and again must be agreed by creditors. The fee is typically deducted from the monthly payments made into the CVA by the company and does not represent an additional cost.
This fee includes:
- The work in preparing a CVA annual review or at time intervals required by the company’s creditors.
- The monitoring of the contributions and distribution to creditors.
- General monitoring of the CVA’s progress in relation to the proposal.
If you are wanting to read more about the process and benefits, please see here – company voluntary arrangement (CVA).