Who can propose a CVA and what is required to start the process?

A CVA can be proposed by the company’s directors, administrators, or liquidators, but in practice it is most often initiated by directors seeking to save their business. To start the process, directors must engage a licensed insolvency practitioner (IP) who assesses whether the business is viable and capable of sustaining repayments under the proposed plan. The insolvency practitioner then drafts a detailed proposal that includes the repayment schedule, financial forecasts, and an explanation of how creditors’ interests will be protected. The proposal must also demonstrate why creditors would be better off supporting the CVA compared to the likely outcome in liquidation. Once prepared, the proposal is filed with the court and circulated to creditors for consideration. This process ensures transparency and accountability, giving creditors the information they need to make an informed decision. Without the involvement of an insolvency practitioner, a CVA cannot proceed, as the IP is essential to ensure fairness and compliance with the law.