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In relation to the first consultation document I highlighted sometime ago the background, growth and possible use of Company Voluntary Arrangements (CVAs) in the corporate restructuring sphere. In particular I argued that consensual Part 1 Insolvency Act 1986 CVAs, i.e. CVAs without moratoriums and used outside administration, could provide a low cost effective restructuring tool. In a later essay I argued in the alternative that the small CVA provisions as introduced by the Insolvency Act 2000 and now represented in Schedule A1 of the Insolvency Act 1986 could be extended to large companies (i.e. those outside s.247 Companies Act 1985 or s.382 Companies Act 2006) so as to allow large company restructuring with the benefit of a moratorium without the costs associated with an accompanying Administration Order being in place. In so doing I went someway to respond to the Conservative Party's call for the adoption of Chapter 11 type automatic stays into English law. The Insolvency Service have been consulting on this CVA extension idea.
Furthermore I argued that instead of adopting a new form of business restructuring tool as advocated by the Conservative Party, which is largely reminiscent of the Irish Examinership model, we should instead extend the small CVA provisions (Schedule A1 Insolvency Act 1986) to larger companies therefore reducing associated reform costs as well as benefiting from a reduction in associated Administration Order costs. The Insolvency Service were doing this. Why revisit this expensive second option when CVA reform was afoot? We already have a veritable smorgasbord of restructuring options. Do we really need another? The results of the consultation will be eagerly anticipated.
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...