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Thursday, 11 June 2009

Bosses urged to tackle debts instead of Dumping them in Pre-Pack Administration

Richard Tyler's article in the Daily Telegraph today is an interesting one about company voluntary arrangements (CVA).

Readers of my web site, eNews and Blog will know I have long campaigned that the best recovery tool for viable, but insolvent companies, is the CVA.

CVA offers a return to creditors (when administration generally leads to nil dividend) , leaves the company under the control of the management, it is much less disruptive than administration or pre-pack administration or voluntary liquidation and finally allows radical restructure of costs, contracts, leases and employment. With a much lower cost of implementation than administration the fees available to Insolvency Practitioners are commensurately lower and therefore more cash stays in the business.

Administration has its place and is a very powerful tool for restructuring. In the recent example of Cobra Beer the main creditor would not agree to the (undisclosed) terms of a proposed CVA, so admin was required.

At KSA Group we have preached CompanyRescue for more than 14 years and we always consider the CVA as tool number one. Our expertise built over that time in over 400 cases means that we can often see a CVA solution where others see liquidation or administration.

To obtain your free 80 page experts guide to CVA's click here

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Many thanks for your comments. If you have a private business problem and you want advice give us a call on 0800 9700 539 or email me at keiths@companyrescue.co.uk. If you are a professional advisor with a troubled client, please suggest they visit www.companyrescue.co.uk or contact me as above.

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