Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether they will review the use of Company Voluntary Arrangements (CVA) and the impact on creditors when company owners have removed significant equity via dividends or capital reconstruction ahead of the CVA process.
The Government consulted on a wide-ranging package of reforms to corporate insolvency generally in 2018 and there are no plans to review the use of Company Voluntary Arrangements (CVA’s) at this time. CVA’s are a valuable part of the restructuring framework. Following this consultation, Government announced it will strengthen the powers available to insolvency practitioners to take recovery action where value has been extracted from a company prior to its insolvency, thereby increasing the protections already available to creditors. These proposals will be introduced when parliamentary time permits.