United Kingdom

Company Voluntary Arrangements (CVAs) 

A Company Voluntary Arrangement (‘CVA’) offers a means for distressed companies to formalise compromise agreements with their creditors.

What's on your mind?


A CVA can:

  • Assist operational turnaround where reduced geographical footprint is needed
  • Vary unattractive contact terms (including property rents)
  • Compromise contingent liabilities


Bringing you peace of mind


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. Although the CVA procedure is administered by a Licensed Insolvency Practitioner, it is perceived as a ‘rescue’ process and the existing Directors remain in control throughout.


What's in it for you?

  • A CVA can facilitate the continuation of a core profitable business and the legal entity, preserving jobs and stakeholder value.
  • It is flexible, powerful and fast; proposals can be tailored to the exact situation (no two are ever the same) and with the support of 75% of voting creditors (by value of debt), the CVA is binding over all unsecured creditors. It only requires 14 days notice to creditors, and the CVA becomes effective immediately after being passed at creditors and members meetings.
  • It is a potential alternative to more disruptive forms of formal insolvency, and typically has a PR benefit as it is seen as a positive step taken by the company.


CVAs have become one of the UK’s most popular corporate lifelines, thanks to KPMG’s effective implementation in multiple recent high profile cases, including Fitness First and Travelodge.


Case studies


Fitness First

Fitness First is the largest global fitness player with 1.2 million customers worldwide, and approximately 150 UK clubs. A reduction in discretionary spending, combined with high operational gearing and significant levels of ongoing capex required to maintain and improve the asset portfolio in light of low customer switching costs, saw the company turn to KPMG.


We developed a bespoke proposal allowing an orderly exit from 67 gyms, a reduction of rent by 35% on other sites for three years with a rent rebasing on exit of the CVA, conversion of all lease property payments to monthly terms, the compromise of parent company guarantees for compromised leases and the establishment of 2 anti-embarrassment funds each containing a minimum in excess of the Prescribed Part maximum.


The CVA was approved by 98% of creditors who voted, including 75% of landlords.



Travelodge operates over 500 hotels in the UK, each held of a long lease. The global economic downturn, inflexible operating property leases, a heavy debt burden resultant from a 2006 buyout and a lack of cash for refurbishments led to the requirement for both financial and operational restructuring.


In parallel with a substantial and complex debt restructuring which saw the elimination of over £700m of group debt, we developed the largest and most comprehensive ever CVA. The proposal allowed an orderly exit from 49 hotels to be transferred to other operators over a six month period while paying 55% of rent; the exit on similar terms from “legacy” sites, sublet and vacant roadside restaurants; and a reduction of rent by 25% on 109 hotels for three years with a rent rebasing on exit of the CVA calculated by reference to rent cover. The CVA was made more attractive by the inclusion of the grant of lease extension options to retained site landlords and the establishment of anti-embarrassment fund containing a minimum of £2.5 million.


The CVA was approved by 97% of creditors who voted, including 95% of landlords, and preserves in excess of 2000 jobs.