Overview

A recent High Court decision, in which Walker Morris acted for the successful applicant, held that, if there is sufficient evidence, the Court will revoke an approved company voluntary arrangement (CVA). Creditors who have legitimate concerns regarding the voting for a CVA should take steps to raise their concerns with the nominee and, if the CVA is approved, can consider if there are grounds to raise a challenge.

Section 6(1)(b) of the Insolvency Act 1986 permits a challenge to be made to a CVA on the grounds that there has been some material irregularity at, or in relation to either of, the meetings (being those of the relevant company and of its creditors). In this case, the applicant alleged that the decision of the nominee wrongly took into account votes of certain apparent creditors, without whom the CVA proposal could not be approved.

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