The David Urquhart Group - Creditors unanimously agree to CVA proposal

Donald McNaught

Donald McNaught

Restructuring Partner

27 May 2020

Donald McNaught and Matt Henderson have now been appointed Joint Supervisors for the approved company voluntary arrangement (CVA) for three companies in the David Urquhart Group; David Urquhart (Travel) Limited, David Urquhart Transport Limited and Hart Hotels Limited.

The three CVA proposals were lodged at the Court of Session on 4 May. Creditors unanimously supported the proposal made by the directors which now allows the directors to focus on the orderly wind down of the business to maximise the value of the remaining assets without the worry that creditors will force the companies into liquidation.

A CVA is a formal deal between an insolvent business and its creditors (lenders), usually over three to five years, and can be a welcome rescue solution to companies experiencing financial hardship.

Commenting on the appointment Donald McNaught said: “CVAs are an underused and underappreciated tool restructuring tool, but they can be highly effective. Not only will this allow the company to continue to trade and benefit from the necessary breathing space to restructure, it will allow creditors to be paid in full.”

In conjunction with the new restructuring tools proposed in the Corporate Insolvency and Governance Bill it is likely that these “debtor in possession” tools (insolvent but with assets), will become more attractive to directors who want to protect their businesses. 

McNaught added: “This recent success really shows what can be done in these challenging times, with planning, collaboration and all stakeholders objectives aligned.”

To find out more about our Restructuring team and how they can help your business, please visit our dedicated Restructuring page.