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KSA Group R3 Presentation by Wayne Harrisonv 2010 Wh14 04 10

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The document discusses key compliance and stakeholder issues related to Company Voluntary Arrangements (CVAs) and schemes. It outlines various areas of legislation, regulations, and case law that CVAs must comply with. It also discusses scrutiny from regulators, creditors, shareholders, and the public. Key areas of compliance for CVAs include case progression, fees disclosure, verifying business plans and forecasts, ethical considerations, and potential conflicts of interest. The document provides tips for managing key stakeholder groups like banks, HMRC, and connected parties in CVA processes.

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R3 CVAs & Schemes Company Voluntary Arrangement - Compliance and key stakeholder issues Wayne Harrison Director of Insolvency - London KSA Group Ltd
Compliance Pressure Points Legislation Insolvency SIPs (3 and 9) Legislation Other EU directives Case Law Regulation Commercial www.companyrescue.co.uk
Compliance Scrutiny Big brother: It is not just our Regulators (RPBs) who are watching! Political Insolvency Service / OFT / MOJ Creditors /shareholders Public Press www.companyrescue.co.uk
Case Management Procedures Legislation Other POCA / MLR Data protection Freedom of Information Health & Safety Environmental Employees (TUPE and pensions) www.companyrescue.co.uk
CVA Compliance key areas Case progression / management mandatory actions in terms and conditions Annual accounting review follow up profit payments Slow action on default Fees disclosure Advisory and/or Nominees fees SIP9: Time costs drawn and WIP incurred Comparison with estimates given at outset www.companyrescue.co.uk
Compliance Key areas Business plan / forecasts Lack of evidence to show extent to which Nominee has verified figures and satisfied himself proposal is viable. Notes/record of advice given A good discipline or a regulatory headache? Ethical considerations CVA to liquidation after failure. Is this a conflict? www.companyrescue.co.uk
KSA CVAs Company Voluntary Arrangement High levels of due diligence Compare all options and assess viability Build detailed statement of affairs Build very detailed financial models What if scenario planning Set out strategies to directors, shareholders bank and advisors Agree deal and then take to creditors Typically 4-5 weeks plus statutory notice period Say 7-9 weeks overall www.companyrescue.co.uk
Creditor Stakeholders www.companyrescue.co.uk
Stakeholders - Bank Early communication is vital Explain CVA and its impact upon bank Protection of security No loss of remedies Continuance of facilities Demonstrate company can still service facilities Explain CVA and its impact upon bank! www.companyrescue.co.uk
Stakeholders HMRC (CVAS) CVAS will consider supporting proposal: Core profitable business Company shares its profits with creditors profit ratchet 5 year term Director sacrifice Salary limitation Loans / investment written off www.companyrescue.co.uk
Stakeholders HMRC CVAS will question proposal: Previous failures Compliance issues Excluded creditors The company has used HMRC used as quasi bank www.companyrescue.co.uk
Stakeholders Connected Board / Director management assistance Improved financial and management reporting SME directors often not great at this! Introduction of non exec FD Improved financial and management reporting SME directors often not great at this! www.companyrescue.co.uk
KSA Group Ltd KSA Group Involved in CVA led turnaround since 1994, c400 clients Provider of online guides for distressed business people assisting hundreds thousands people annually KSA has a team of 20 with 2 insolvency practitioners Cover the country with 3 offices & a team of regional managers Learn more about CVAs and KSA at www.companyrescue.co.uk www.companyrescue.co.uk

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KSA Group R3 Presentation by Wayne Harrisonv 2010 Wh14 04 10

  • 1. R3 CVAs & Schemes Company Voluntary Arrangement - Compliance and key stakeholder issues Wayne Harrison Director of Insolvency - London KSA Group Ltd
  • 2. Compliance Pressure Points Legislation Insolvency SIPs (3 and 9) Legislation Other EU directives Case Law Regulation Commercial www.companyrescue.co.uk
  • 3. Compliance Scrutiny Big brother: It is not just our Regulators (RPBs) who are watching! Political Insolvency Service / OFT / MOJ Creditors /shareholders Public Press www.companyrescue.co.uk
  • 4. Case Management Procedures Legislation Other POCA / MLR Data protection Freedom of Information Health & Safety Environmental Employees (TUPE and pensions) www.companyrescue.co.uk
  • 5. CVA Compliance key areas Case progression / management mandatory actions in terms and conditions Annual accounting review follow up profit payments Slow action on default Fees disclosure Advisory and/or Nominees fees SIP9: Time costs drawn and WIP incurred Comparison with estimates given at outset www.companyrescue.co.uk
  • 6. Compliance Key areas Business plan / forecasts Lack of evidence to show extent to which Nominee has verified figures and satisfied himself proposal is viable. Notes/record of advice given A good discipline or a regulatory headache? Ethical considerations CVA to liquidation after failure. Is this a conflict? www.companyrescue.co.uk
  • 7. KSA CVAs Company Voluntary Arrangement High levels of due diligence Compare all options and assess viability Build detailed statement of affairs Build very detailed financial models What if scenario planning Set out strategies to directors, shareholders bank and advisors Agree deal and then take to creditors Typically 4-5 weeks plus statutory notice period Say 7-9 weeks overall www.companyrescue.co.uk
  • 9. Stakeholders - Bank Early communication is vital Explain CVA and its impact upon bank Protection of security No loss of remedies Continuance of facilities Demonstrate company can still service facilities Explain CVA and its impact upon bank! www.companyrescue.co.uk
  • 10. Stakeholders HMRC (CVAS) CVAS will consider supporting proposal: Core profitable business Company shares its profits with creditors profit ratchet 5 year term Director sacrifice Salary limitation Loans / investment written off www.companyrescue.co.uk
  • 11. Stakeholders HMRC CVAS will question proposal: Previous failures Compliance issues Excluded creditors The company has used HMRC used as quasi bank www.companyrescue.co.uk
  • 12. Stakeholders Connected Board / Director management assistance Improved financial and management reporting SME directors often not great at this! Introduction of non exec FD Improved financial and management reporting SME directors often not great at this! www.companyrescue.co.uk
  • 13. KSA Group Ltd KSA Group Involved in CVA led turnaround since 1994, c400 clients Provider of online guides for distressed business people assisting hundreds thousands people annually KSA has a team of 20 with 2 insolvency practitioners Cover the country with 3 offices & a team of regional managers Learn more about CVAs and KSA at www.companyrescue.co.uk www.companyrescue.co.uk