One in 10 companies that entered into a Company Voluntary Arrangement (CVA) has gone into administration in the last three years, according to recent research.
A CVA is a powerful restructuring tool for businesses in distress, which typically enables insolvent companies to pay back a percentage of their debts over an extended period of time. But CVAs are not always sufficient to prevent a company entering administration, as shown recently by BHS and Austin Reed, and landlords must be prepared and know how to deal with financially distressed tenants, as well as be mindful of the effect a CVA may have on them.
“Unsecured creditors, commercial landlords in particular, need to carefully analyse the impact of the proposed CVA and consider whether there are other ways to protect their positions. When faced with a tenant entering into a CVA, landlords should act promptly and ensure that they fully exercise their rights to make representations,” a spokesperson says.
At Beavis Morgan, we have extensive experience in advising individuals and businesses on all aspects of the property market. We act for a broad range of property investors and developers who actively need advice on how to best structure their property deals, both to ring-fence and protect their property assets, as well as to minimise the tax arising from their business operations.