Partnership Voluntary Arrangements

Partnership Voluntary Arrangements (PVA) are a very useful restructuring tool.  A PVA is a legally binding arrangement with your creditors to repay the partnership’s debts via monthly contributions over a set period of time, usually three to five years.

PVAs can afford a level of debt forgiveness with your creditors. Dependent upon the partnership’s circumstances and how much it can afford to make in monthly contributions, could mean that only a proportion of the total amount outstanding is repaid.

A PVA protects the partnership from hostile creditor action.  This is known as an interim moratorium, which gives the partnership a set period of time in which to generate proposals for a PVA, and to allow those proposals to be voted on by the partnership’s creditors.

During that period of time, no action can be taken against the Partnership.

A PVA may be suitable in the following circumstances:-

• You are the victim of a large bad debt
• You lose a big customer
• You need to reorganise the structure of your business
• Too much pressure from VAT and PAYE
• You know where the mistakes have been made and how to do things better this time.
• The only significant debts you have are in relation to the partnership, and not you as an individual. Although the approval of the PVA will protect the partners' individual estates from partnership creditors there will be no protection for the partners from their individual creditors. It may therefore be necessary for the partners to consider proposing Individual Voluntary Arrangements in addition to a PVA if they are at risk from individual creditors.

The partnership voluntary arrangements procedure

• The partners of the firm must propose the PVA. The partnership deeds may provide expressly for what majority is required to decide to propose a PVA.
• With the assistance of the Nominee and your case administrator your Proposal is put together.
•  The Proposal will contain details of the financial state of the partnership, in particular its assets, liabilities and the level of monthly contribution payment which will be offered to partnership creditors in the Proposal. Together with a history of the business and a omparison between what creditors would likely recive in an IVA or through winding up the partnership.
• Once the partners have agreed the proposal, the Nominee (representative from Bridgestones) writes to court stating the PVA has a reasonable prospect of being approved and implemented.  A date is set for the meeting of creditors where those proposals will be voted on.
• Creditors are sent at least 14 days notice of this meeting, along with a copy of the report.
• The proposals are discussed at the meeting, and if necessary modified to bring an acceptable proposal for both sides. Your Bridgestones case administrator will make sure that you fully understand every modification before you accept them.
• Provided that overall more than 75% of creditors voting accept the PVA, the PVA is then implemented.
• Once the PVA has been approved the Nominee becomes the Supervisor and along with your case administrator carries out regular reviews of the conduct of the partnership to ensure that all terms of the Proposal are being adhered to.
• There is a duty imposed on the Supervisor to keep all creditors informed as to its progress. Upon each anniversary of the PVA, a Report is sent to the partners, all creditors and Court.

The case administrators at Bridgestones understand that this is a difficult time for you and will remain professional and non-judgmental at all times when asking you to inform them of your personal situation. We are here to help, and provide a solution to your problems.

If a PVA sounds like the appropriate course of action, call Bridgestones now.

Client Testimonials

We both can't thank you enough for all the help you have given to us. We both feel now we can get our lives back on track and look forward to a better life. You have all been brilliant. Thank you.

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