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Corporate insolvency measures

Definitions of four examples of measures that are frequently implemented in cases of corporate insolvency, from ICAEW's guidance on business recovery.

Company voluntary arrangement (CVA)

A CVA allows a company that owes money to enter into an arrangement with creditors to repay its debts or a percentage of them. In voluntary arrangements, the Insolvency Practitioner (IP) will initially be the nominee for the proposed arrangement.

As nominee, the IP has to make sure creditors receive the information to decide whether they want to approve the arrangement. If the arrangement is approved, the IP will become the supervisor and be responsible for making sure any agreed terms are met.


An administration allows an IP to try to rescue a company or sell its assets to repay the creditors as much of what they’re owed as possible. In some cases, the IP advises the directors or a major creditor on the different options available before the administrator is appointed.

A pre-pack administration is an arrangement under which the sale of all or part of the company’s business and assets is negotiated with a purchaser before the administrator is appointed. Soon after appointment, the administrator completes the sale. If there’s been a pre-pack, the administrator will send creditors notification explaining why the pre-pack was appropriate.


A receivership is a procedure to recover money lent to a business for a secured creditor (such as a bank). In some receivership situations the IP advises directors or the secured creditor on the different options available before the receiver is appointed.


In liquidations, assets are collected and sold by the IP. The proceeds are used to pay creditors, in a specific order. The courts can order compulsory liquidation (called winding-up) or directors of the company may decide to put the company into voluntary liquidation. In a compulsory liquidation, the Official Receiver initially acts as liquidator.

An IP may be appointed later. Before a voluntary liquidation, an IP may help directors meet legal duties, calling meetings of shareholders and seeking a decision from creditors. If a business is solvent, it may be wound-up in a members’ voluntary liquidation. An IP must still be appointed liquidator and it must be possible to pay all creditors in full, with statutory interest, if applicable.