Compromise Agreements

Cork Gully can provide assistance to the Board and management to draft and offer compromise agreements with the company's creditors. Typically, these take the form of:

• Schemes of arrangement
• Company Voluntary Arrangement

Schemes of arrangement

Schemes of Arrangement are a well-established method to help with the restructuring of a company. Commonly these schemes are applied to insurance/reinsurance and overseas companies as a way of exiting the business early and releasing surplus capital.

Working closely with senior management; Cork Gully will draw up a detailed Scheme document, setting out a timetable and will liaise with all parties to make sure that the Scheme is implemented and the business is properly concluded. In effect it enables companies to avoid some common problems, such as reducing run-off costs, evaluating and dealing with creditors’ claims and making an earlier return of equity to members and shareholders.

There are three key elements to a successful Scheme:

• Preparing a Scheme document that meets the needs of the stakeholders (including, members, creditors, FSA etc)
• Ensuring the project team is equipped and resourced to carry out the plan in the allotted time frame and that all parties and stakeholders are properly briefed
• Agreeing and adhering to a realistic timetable

Company voluntary arrangement

Company Voluntary Arrangements (CVAs) are a fairly common device and can be used by an insolvent company to help reduce and reschedule payments to its creditors. A CVA must be approved by creditors before it can be implemented and provides a way for a struggling business to improve its cash flow and work through its difficulties.

A CVA takes place between the company and its creditors and can be tailored to suit specific circumstances. Typically, CVAs can last for three to five years and if successful will prevent a business from going into administration.

At Cork Gully our team has significant experience in assisting directors in the preparation of proposals for CVAs and in acting as supervisors in approved arrangements.  We will thoroughly discuss the options available to the company before considering this route to ensure the best solution is found to enable your business to continue.