How do creditors vote on a CVA proposal?

Creditors play a central role in deciding whether a CVA goes ahead. Once the insolvency practitioner has drafted the proposal, all known creditors are invited to vote. For the CVA to be approved, at least 75% by value of those voting must support it. Importantly, this threshold is based on the value of the debt represented by those creditors who actually vote, not the total creditor base. This means that engaging with key creditors early in the process is vital to ensure they understand the benefits of the proposal. If approval is granted, the CVA becomes legally binding on all unsecured creditors, even those who voted against it or chose not to vote. To prevent unfair treatment, a second vote may be required if there is a risk that connected creditors could dominate the outcome. In such cases, at least 50% of unconnected creditors by value must also approve the arrangement. This voting structure ensures that CVAs are fair and transparent while balancing the interests of all stakeholders.