The Arcadia Group, synonymous with brands such as Topshop, Dorothy Perkins and Wallis, has confirmed plans to implement a series of Company Voluntary Arrangements (CVAs), granting the company valuable time to restructure its debts in order survive.
Despite facing intense legal challenges last month, whereby two of Arcadia’s US landlords attempted to block its restructuring plans, Arcadia have now confirmed they have been given the green light to proceed with 7 CVAs.
Intended to ease the pressures facing retail tycoon Sir Phillip Green’s fashion empire and provide greater protection against mounting debt, the CVAs will grant the business vital time to trade out of their current difficulties, and avoid a formal Insolvency procedure, such as Administration.
So, what is a CVA?
CVAs are often used by companies that are struggling financially, but ultimately remain viable businesses; they just need protection and time to trade out of their current difficulties.
A legally binding compromise between a company and its creditors, a CVA allows debt to be paid back gradually over a fixed period, giving the company time to address the operational issues that exist within the organisation.
What are the benefits of a CVA?
- Unlike other Insolvency processes such as Administration, the relationship between the company and its creditors remains essentially private as the information does not have to be disclosed
- It provides the company with binding protection against creditors and greater levels of control and flexibility
- Interest and charges due are frozen to relieve creditor pressure
- Trading continues whilst restructuring options are explored
- Costs can be reduced, such as contracts and leases
- The company can retain any tax benefits that it is entitled to
- Creditors are usually supportive of a CVA, as they are likely to achieve a better outcome
More comprehensive details about the CVA process can be found on our website by clicking here.
How we can help
From negotiating agreements between a company and its creditors, to establishing the terms of a CVA and implementing it, our team are at here to support businesses at each stage of the process.
Our award-winning team of Business Recovery and Insolvency experts advise on a range of Insolvency options from all perspectives including creditors, debtors, individuals or businesses.
If you are looking for advice regarding your financial situation, we are here to provide timely, proactive and candid advice on all the options available to you. Please do not hesitate to get in touch.