R3 Northern Ireland has developed a free Standard Form for Company Voluntary Arrangements (CVAs), which aims to make it easier for small businesses affected by the Covid-19 pandemic to enter a CVA. The document provides a foundation for CVA proposals to be developed, helping to cut costs and the time needed to come up with a potentially workable set of proposals – something that is especially needed in the current climate for businesses.
The new R3 Covid-19 CVA Standard Form for Northern Ireland, which is available from R3’s website, includes a breathing space period to allow a company time to restructure without fear of action from its creditors, to be followed by a payment period where a company’s debts are paid in line with the CVA agreement. No recommendations have been made for the timescales of these periods, in order to allow the business and its creditors the freedom to negotiate them.
An additional introductory period of a maximum of three months is also included in the document for companies which have not resumed trading as a result of the pandemic, as well as the ability to temporarily halt payments if the company is in local lockdown.
The document has had comment and constructive criticism from a broad range of insolvency professionals, all working for free to seek to help the SME market in these unprecedented times.
James Neill, Chair of R3 Northern Ireland said: “SMEs are the backbone of Northern Ireland’s economy, but these are the businesses which have been hit hardest by Covid-19 and the subsequent lockdowns. As a result, many of them will have been forced to consider an insolvency process, or to seek insolvency advice when they would most likely have never had to in normal circumstances. This document aims to make CVAs as accessible as possible to SMEs, so they can benefit from the flexibility and business rescue options provided by the procedure. One of the advantages of CVAs is that they are a bespoke and flexible process, and each company will be able to adapt the Standard Form to suit its own circumstances. This is one of many tools available to insolvency practitioners, and with early advice can help management rescue their company, paying their creditors and keeping their employees in work.”
To view a copy of the Standard Form, visit: https://www.r3.org.uk/technical-library/northern-ireland/technical-guidance/r3-standard-form-covid-19-cva-proposal/
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