The company voluntary arrangement (CVA) is a relatively obscure insolvency procedure whose use has traditionally been overshadowed by administration. A CVA is essentially a contract between a company and its unsecured creditors which sets out the terms on which the company can continue trading. Implementation of a CVA requires the approval of 75 per cent of creditors by value, who vote on the proposal.

There are two main reasons why CVAs are likely to be used more widely in the future: