Company Voluntary Arrangements (CVAs) 

May include:

• Over-rented properties
• Unsustainable pension deficits
• Unsustainable capital structure
• Onerous critical contact

• A CVA can lend itself well particularly to those companies operating from a large number of sites that need to downsize in order to be viable. It is a mechanism for consummating open and honest negotiation with all affected stakeholders.
• The proposals to creditors can be tailored to the exact needs of the business, and, provided that 75 percent of all creditors by value who vote approve the CVA, they are binding on all unsecured creditors.
• The CVA is also rapid - between 14-28 days notice to creditors is all that is required for the meeting of creditors, and the CVA is effective and binding on all unsecured creditors (including defined benefit pension schemes) immediately on approval, and in general can no longer be challenged 28 days following the creditors' meeting.

• A CVA can facilitate the continuation of a core profitable business and the legal entity, preserving jobs and stakeholder value.
• It is flexible and rapid between 14 to 28 days notice of a creditors' meeting is all that is needed.
• It is a potential alternative to more disruptive forms of formal insolvency.

• CVAs were generally a lesser used insolvency procedure in the past, but are now tipped to become one of the UK's most popular corporate lifelines, thanks to KPMG's effective implementation in two recent high profile cases, JJB and Discover Leisure.

JJB Sports plc

• JJB Sports plc (JJB) is a high street retailer which had fallen into difficulties and could not determine a mechanism for dealing with the lease costs of its closed stores, which created cash pressures. A rescue of the business would only be possible if its landlords consented to a compromise. However, there had already been other high-profile failures to achieve landlord consent.
• We developed a tailored CVA which was approved by 99 percent of creditors. Blane Leisure Ltd's CVA (a wholly owned subsidiary) was approved by 98 percent of creditors. No one in attendance at the creditors' meeting voted against the proposal.
  The CVA enabled the company to continue operating, preserving some 12,000 jobs and preventing further store closures.

Discover Leisure plc, based in the North East of England, is a group listed on the Alternative Investment Market (AIM) of the London Stock Exchange and is engaged in the retail sale of caravans, motorhomes and leisure goods from 16 sites throughout England and Wales.
The Company suffered from reduced consumer demand, leaving it with a multi-million pound stock overhang and a loss making business. A rescue of the business would only be possible if the creditors accepted a significant reduction of unsecured debt, its landlords consented to the surrender of leases and the business managed to reduce its employee levels. We developed a tailored CVA which was approved by 99.7 percent of creditors.
This result allowed Discover Leisure to remain as a going concern, to keep trading and to continue the restructuring it began some time ago, offering job security to 300 employees and some certainty to its other stakeholders.