Chapter 13 - CVAs Flashcards
The nominees judgement for the report in a CVA should include 3 things:
- the company’s financial position is materially different from that contained in the proposals, explain the extent to which the information has been verified
- the CVA is manifestly unfair
- the CVA has a reasonable prospect of being approved and implemented
Does a supervisor of a CVA have powers under:
S238
S239
S244
No
Is a moratorium available in a CVA?
No, only available to small Companies
Who can a proposal for a CVA be made by?
- a liquidator or administrator where company is in liquidation or administration
- the directors s1(1)
Which SIP relates to CVAs?
SIP 3.2
CVA - within what time frame after a nominee endorses a notice of the proposal with the consent to act must the nominee file in court their comments on the proposal?
28 days
How many directors must verify the statement of affairs in the proposal for a CVA?
At least 1 director
CVA - what date must Statement of affairs be made up within?
Within 14 days of the notice of the proposal given to nominee
A nominee who consents to act must deliver a notice of that consent to the proposer within what time frame?
As soon as reasonable practicable after the proposal has been submitted to the nominee
CVA - in what time frame must the Creditors Decision be held after the nominee has filed their report on the proposal?
Within 28 days
How much notice needs to be given to creditors for a decision on a proposal for CVA?
14 days
CVA - if the creditors decision meeting and the shareholders decision meeting are not on the same day, within what time frame must the SH meeting be held after the creditors meeting?
Within 5 business days
CVA - after creditors receive notice of decision procedure, how long do they have to object and ask for a physical meeting? and how much notice should be given for physical meeting?
5 business days to ask for physical meeting
7 days notice for physical meeting
CVA - nominee calls meeting of creditors and meeting of shareholders, what needs to be sent?
- Notice of meeting
- Proposal of CVA
- SoA
- Nominees report
- Proof/proxy (voting papers)
- Fee guidance, or link to this
CVA - what percentage of creditors need to agree? on
1st vote
2nd vote
1st vote - 75% or more need to vote in favour
2nd vote - excludes connected parties, less than 50% reject
Cannot use general proxy in first round of voting and in 2nd round it is only used in the total, not within the vote
CVA - what if members vote against CVA?
If the creditors voted for CVA, then Company still enters CVA
CVA - if members want to appeal decision of creditors, what timeframe must this be done in?
Member can apply to court within 28 days
CVA - how long can a meeting be suspended for?
Up to an hour
CVA - if creditors decision meeting is adjourned, when must it be completed by?
Within 14 days from the original meeting
CVA - chairman’s report must be filed in court within what timeframe?
within 4 business days
CVA - chairman’s report must be filed at Registrar of Companies within what time frame after being filed at court?
As soon as reasonably practicable
CVA - notice of creditors decision must be sent to creditors/members within what time frame?
As soon as reasonably practicable
If an administration is converting to a CVA, what does not need to be included?
A report to he court and comments on proposal are not required if the liquidator or administrator is to act as nominee.
Nor do they need to give consent again, as it is the administrator that is drafting proposal
CVA - how long do creditors have to appeal a CVA?
28 days
CVA - on what grounds could a creditor appeal a CVA?
- Material irregularity
- Unfair prejudice
When must progress reports be completed in a CVA?
First report must cover the period of 12 months commencing on date when CVA was approved and every subsequent 12 months.
Must be sent to CH within 2 months to CH, creditors and AUDITORS
Who must the final report in a CVA be sent to? and within what time frame?
Within 28 days of completion, must send notice that CVA has been fully implemented or terminated together with his report summarising his receipts and payments within 28 days.
Sent to creditors, members, registrar of Companies and COURT
Does the supervisor of a CVA have the power to present a winding up petition?
Yes
Which of the following persons may not make a proposal for CVA?
Directors
Contributories
Liquidator where Co. in liquidation
Administrator where Co. in administration
Contributories
Can a supervisor in a CVA bring proceedings for wrongful trading?
No
Is the prescribed part applicable in a CVA procedure?
No
Criteria for small company?
Must meet two of the following three:
- turnover no greater than £10.2m
- assets on BS no greater than £5.1m
- No more than 50 employees
Does a supervisor of a CVA have to prepare a D report?
No
Does a supervisor of a CVA have power to challenge transactions at under value?
No
Can a supervisor of a CVA bring proceedings against directors for wrongful trading?
No
Can a supervisor of a CVA apply to court for direction?
Yes
Can a supervisor of a CVA present a petition for winding up the company?
Yes
If a director wants to amend a CVA proposal after giving it to the nominee, can they?
The directors may amend provided that nominee gives written consent for them to do so
A creditor wants to challenge a CVA, with in what time frame must they do this?
within 28 days of becoming aware of the creditors meeting
Who must a supervisor sent copy of annual progress report to?
Companies House
The Company
Bound Creditors
Members of Co. who request copy
Company auditors
DO NOT NEED TO SEND TO COURT
True or False - all companies are eligible for the new moratorium procedure under the Corporate Insolvency and Governance Act 2020 unless subject to an insolvency or moratorium in the last 12 months
True
Who may apply for a Part A1 IA85 moratorium?
DirectorsW
Who may apply for a Part26 CA 06 Scheme?
The company (acting through its directors)
Any creditor or member
Liquidator
Administrator
How long does a moratorium obtained under the new provisions introduced by the Corporate Insolvency and Governance Act 2020 PartA1 I86 moratorium initially run for?
How can it be extended and for how long?
20 business days
- extend by directors by filing in court, must be done after 15 days but before the 20 bus days over, will extend by 20 bus days
- extend with creditor consent up to 1 year
- extend by the court
Part A1 IA86 moratorium under Corporate Insolvency and Governance Act 2020 who approves this?
Approval of creditors or shareholders is not required
Part A1 IA86 moratorium under Corporate Insolvency and Governance Act 2020 what notice needs to be given to qualifying floating charge holders?
None
No requirement to give prior notice to qualifying floating charge holders
Part A1 IA86 moratorium under Corporate Insolvency and Governance Act 2020 , does the monitor need to be an Insolvency Practitioner?
Yes
Part A1 IA86 moratorium under Corporate Insolvency and Governance Act 2020 - who can present a winding up order>
Directors
Part A1 IA86 moratorium under Corporate Insolvency and Governance Act 2020 - can a QFCH appoint an administrative receiver?
No
Part A1 IA86 moratorium under Corporate Insolvency and Governance Act 2020 - can landlords exercise CRAR?
No
Part A1 IA86 moratorium under Corporate Insolvency and Governance Act 2020 - company may not obtained creditor in extent of what value or more unless the provider of the credit is informed that a moratorium is in force?
£500
What is the voting majority needed to approval a Part26A restructuring plan?
75%
CIGA 2020, what is the role of the courts in:
Part1A IA86 Moratorium
Part 26A CA 6 Scheme
Part1A IA86 Moratorium - application to court if company is overseas or subject to an extant winding up order.
Part 26A CA 6 Scheme
Two court hearings - one to approve the calling of class meetings to vote on the proposed scheme and one once the meetings have approved the scheme to authorise implementation of the restructuring plan
Does the trustee/administrator of a Part 26 CA 06 Scheme of arrangement need to be an Insolvency Practictioner?
No
