Advantages of Company voluntary arrangements to Creditors
Advantages of Company voluntary arrangements to CreditorsCompany voluntary arrangements carry an advantage to the creditors as opposed to the liquidation option. One such advantage is that the creditors get to be paid more money than they would be paid than the money they are paid at liquidation. A Company voluntary arrangement puts the company directors on toes to work hard to have the business survive, and thus the creditors in return may have a certain degree of assurance of recovery of their money. There may be certain times that the directors of a company may provide untrue records and therefore err on the financial status of the company. The possibility to lie of the financial situation of the company is reduced through the establishment of a strict CVA. The creditors will be able to know the true status of the financial position of the company, and this avails them with an option to choose what to want-either liquidation or the option of having the company survive to pay the money.
