CVA (Company Voluntary Arrangement) - Can we get one accepted?

[True_Ger_1872 2]

Pardon my ignorance here but could in theory, A CVA be reached with creditors prior to the bill from the big tax case and we can leave administration before being hit? Effectivley reducing our other debts and outgoings so we can come out more likely to be able to manage the massive debt?

 

And perhaps this is when our phantom cashflow will reappear to knock a chunk of the figure out?

 

Just a thought...

 

Sent from my GT-I9000 using Tapatalk

[capstans 0]

I believe CVA is the sole voting remit of unsecured creditors which could if they can muster 75% of unsecured debt, put us at the mercy of the revenue subject to the tribunal result.

[craig 5,199]

I believe CVA is the sole voting remit of unsecured creditors which could if they can muster 75% of unsecured debt, put us at the mercy of the revenue subject to the tribunal result.

 

I think that the CVA is put to all listed creditors, not just unsecured, at the time of administration, is it not ? Which means that HMRC cannot use that FTT liability to ensure voting rights to the extent of their supposed liability, when that liability is being contested.

 

They can, however, use the 9 million VAT/PAYE/NIC debt for the voting power.

 

Now, this may just be the cynic in me, but I find it relatively revealing that CW is a secured creditor to the tune of, what, 40 mill (18 mill to LBG plus 20 to ticketus) - add the HMRC liability of 9 mill plus other liabilities of, say, 3 mill and CW would be relatively close to dropping below the 75% threshold needed to get approval for a CVA.

 

It could easily be that CW needed to enter administration as he was getting perilously close to being below the magical 75% figure.

 

 

 

Here is the language pertaining to this : http://www.debthelpuk.co.uk/cva.html

 

The meeting of creditors on the other hand is an important event. That meeting is conducted by the IP who has assisted the directors in preparing the CVA proposal. In practical terms it is important that at least one director is present at the creditors meeting. There are two reasons for this. Firstly, it is the directors who are going to continue to run the company on a day to day basis. Secondly, it is likely that creditors representatives will wish to put questions to the directors and propose alterations or "modifications" to the CVA proposal. If the proposal has been prepared with sufficient thought any modifications ought to be technical and minor. Nevertheless, it may be necessary for the company to agree those modifications in order to ensure that 75% by value of creditors voting at the meeting approve the CVA terms.

 

An important feature of the CVA procedure is that if a creditors meeting approves terms for a CVA then the approval binds all creditors of the company who have, or ought to have, been given notice of the creditors meeting. This means that so long as a 75% by value majority is obtained at the creditors meeting, subject to specific exceptions, the terms of the VA are binding on those creditors who voted for the rejection of the proposal and also those creditors who did not vote at all. In particular creditors who voted against, or did not vote at all, cannot generally commence or continue legal proceeding against the company for debts which arose prior to the commencement of the CVA.

[capstans 0]

I cant do link on phone but it was a definitive that CVA is for unsecured creditors. Simms & partners website states clearly secured creditors do not vote on CVA's.

 

F.A. Simms & Partners Plc

Edited February 15, 2012 by capstans

[chilledbear 16]

Neil Patey, football finance expert with Ernst and Young, told STVâ??s Scotland Tonight programme on Tuesday that the unpaid HMRC money could jeopardise any attempt to a creditors voluntary agreement to bring Rangers out of administration.

 

He said: "I think it [liquidation] is a very serious possibility. The administrator needs to reach agreement with 75% of the creditors by value. We know that HMRC are a major creditor, but the administrators will need the agreement of HMRC if they are going to get a CVA.

 

"I fear the revenue is going to take a very tough stance on this one and while normally a good underlying business would come out of administration, with this one, on the balance of chances, it might have to go down the liquidation route."

[der Berliner 3,283]

major creditor, secured creditor, unsecured creditor ... and sometimes they have a say and sometimes they don't. So far, the tribunal's result has not been published, so the "big case claim" remains a hypothetical one (whether or not HMRC wants to go through all tiers here), there is the small issue (with much of it ringfenced in our accounts anyway) and the VAT/PAYE/you name it one reported here and there. Who owns the latter to HMRC though? Whyte? Rangers? And if it is the former, could HMRC use it against Rangers' administration plans ... or just against Whyte / TRG?

[craig 5,199]

I cant do link on phone but it was a definitive that CVA is for unsecured creditors. Simms & partners website states clearly secured creditors do not vote on CVA's.

 

F.A. Simms & Partners Plc

 

Thanks capstans. Here is the link and relevant language : http://www.fasimms.com/CVA_FAQs.html

 

How is a CVA approved?

 

75% of unsecured creditors by value must approve a CVA. Remember this is 75% voting on the day. 50% of non-associated creditors by value must also vote in support.

 

What happens to my secured creditors?

 

 

■Secured creditors do not vote in a CVA

■They will need to be comfortable with the CVA and will often run, as before the CVA, during the CVA

■Remember secured lenders prefer a solution not a problem

[craig 5,199]

major creditor, secured creditor, unsecured creditor ... and sometimes they have a say and sometimes they don't. So far, the tribunal's result has not been published, so the "big case claim" remains a hypothetical one (whether or not HMRC wants to go through all tiers here), there is the small issue (with much of it ringfenced in our accounts anyway) and the VAT/PAYE/you name it one reported here and there. Who owns the latter to HMRC though? Whyte? Rangers? And if it is the former, could HMRC use it against Rangers' administration plans ... or just against Whyte / TRG?

 

The latter one, I presume you mean the VAT/PAYE & NIC one ? That will be owed by Rangers as the players, staff etc will be employees of that entity.

[capstans 0]

Point being that if Hmrc get 75% of the unsecured debt they can if they dont like the CVA offer apply to wind us up.

 

murray is for some reason gettimg off far to lightly in this debacle.

[craig 5,199]

Point being that if Hmrc get 75% of the unsecured debt they can if they dont like the CVA offer apply to wind us up.

 

murray is for some reason gettimg off far to lightly in this debacle.

 

Which Murray ?

 

HMRC, with a 9 million debt, will probably make up more than 25% of the debt I would suspect, which will allow them to veto the CVA if they so choose. In order for them to not have that right (on thier own) the unsecured debt would have to be 36 million.

 

Even in our parlous state we surely dont have 27 million of unsecured debt outside of HMRC ? Even then, if one of the other creditors dont approve, then the CVA would also not happen.