Futuremedia Public Ltd. Co. (fka FMDAY)

[Trompi]

But first, a little history; the CVA has been in UK law since 1986. In London alone, over 12,000 companies have taken advantage of this rescue option. In short, qualifying companies that are struggling with cash flow or excessive legacy debts can negotiate a deal with all its creditors at once that allows the company to repay some of its legacy debt out of future profits over an agreed upon period of time. The catch is that the company must demonstrate to the UK courts that it has a viable business plan going forward. Additionally, it may not pay out dividends during the CVA period and must receive approval from 75% of the unsecured creditors and 50% of the company shareholders. Speaking of shareholders, it is important to note that the shareholders’ ownership stake is in no way affected by a CVA. Also, the company’s directors remain in control and the company does not go into liquidation. It is strictly a deal between a company and its creditors.