What happens during the CVA process?
Meetings of creditors and shareholders will be held in order for the proposal to be voted on by those persons. If 75%, or more, by value of those voting, of the creditors (and 50% of the shareholders) approve the proposal, the proposal will be deemed approved.
The implementation of a CVA will give the company an opportunity to restructure and return to profitability and will usually repay its creditors from future profits or a lump sum payment from a third party.
Once the proposal is approved by creditors and shareholders of the CVA, the insolvency practitioner who acted as nominee usually becomes the supervisor of the CVA, whose functions include ensuring that the company complies with its obligations under the CVA proposal and paying dividends to creditors.