Chipsworld Ltd had to enter into a company voluntary arrangement or CVA because of its debts with HMRC. However, there are no signs of panic as the company’s 18 franchised outlets as well as its website remains safe. Chips’ joint MD Don McCabe said, “We were hoping to avoid the CVA, but we had to go into it in the end. It means we are having to prepare ourselves and trim a few things down”.
CVA is one of the most important business tools that companies can use in UK. Many companies in UK are not aware of this arrangement. The fact is whenever we are talking about debt; we get a picture of measures that can help only individuals. Just as an IVA is essential for a debtor, a CVA is also equally important for a company that is stuck in debts.
A CVA is like a debt management plan for companies in UK to deal with debts. The company in debt reaches a formal binding agreement with its creditors for paying them back over a certain period of time. A CVA is a formal route out of debts for businesses in UK. For this an application has to be made to the court for a moratorium period which means that the creditors would not take any more action against the company concerned. This time period is for 28 days. After this, a meeting of creditors and shareholders is arranged for the approval of CVA. If 75% of the creditors agree to this, the CVA becomes binding on the creditors. A CVA is safe because it is more of a private affair and does not involve any kind of public flash of the company’s state.
Similarly Chipsworld Ltd also has resorted to a CVA to protect its customers, suppliers, employers as well as itself. It has thrown a positive light on the company and serves as a protective shield thus giving it time to recover from this financial crunch. The good factor is that this CVA has not affected the internal or external customer base. It is good to see that Don McCabe and Nik Agar still continue with their business administration and take all the necessary commercial decisions within the CVA framework.
Stores which NOT linked to this in anyway are: CHIPS Stockton, Stafford, Skipton, Hartlepool, Arnold, Lytham St Anne’s, Yeovil, Consett, Chester-Le-Street, Guisborough, Chorlton, Newcastle-Under-Lyme, Woodley, Ashford, Ormskirk, Dudley, Longton & Market Harborough.
For tips and advice on other simple debt solutions, visit www.yesdebtfree.co.uk.