Creditors’ Voluntary Liquidations (CVL)
A Creditors’ Voluntary Liquidation, or CVL, is a formal liquidation procedure, which enables the swift closure of an insolvent company by its directors and the distribution of the resulting funds to its creditors.
This option may be considered where a company is facing significant creditor pressure and has little or no cash flow.
Unlike a compulsory liquidation, a CVL is a voluntary procedure.
Opting for a CVL can be a quick and efficient way of dealing with the situation, which reduces the risk of any action for wrongful trading, and may offer the opportunity for directors to acquire company assets.
Liquidation will not normally affect the directors’ ability to be the director of another company, and employees (including salaried directors) may be entitled to redundancy payments from the government.
The experienced team at Gibson Booth can work with you to help determine whether your company could still be viable, or whether liquidation is the best option.
If you’re considering a CVL, or require further advice on your company’s options, please contact our friendly team.