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Trading during CVA

Trading during CVA

Do the directors of a company which is in a CVA have a duty to disclose to new creditors that their company is in a CVA? If so, do directors who fail to disclose that their company is in a CVA become personally liable for new debts which the company fails to pay? Presumably, if a new creditor takes action to recover a debt which the company incurs whilst it is in a CVA and fails to pay, the CVA will eventually fail. In this event, do the directors become personally liable for the company's debts because they have been wrongfully trading?  


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07th Mar 2016 15:58

As a starting point I would have a look at what the CVA Proposal as accepted by creditors says about incurring credit from "new creditors".

New creditors won't be bound by the terms of the CVA so any unpaid "new creditor" owed £750 or more could put the company into Compulsory Liquidation and prejudice the CVA deal.

Any supplier worth their salt would at least have a look at the company's records at Companies House and see that the company is the subject of a CVA.

Does the supplier's credit application form make any reference to whether the company or any of  its directors  are or have been the subject of  formal  insolvency proceedings or any other agreement or arrangement with creditors?

Wrongful trading and personal liabilities are the subjects of week-long courses!

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