Partnership Voluntary Arrangement

A Partnership Voluntary Arrangement (“PVA”) is a formal arrangement between a partnership and its creditors that allows a proportion of debt to be paid back over a period of time to the unsecured creditors and is similar to a CVA.

A PVA is likely to represent a big commitment but if the underlying business is viable and, importantly, the partners are committed in their objectives, it can be a powerful tool.

A PVA is often linked to two or more contemporaneous interlocking Individual Voluntary Arrangements so as to protect both the partnership and the individual partners. The PVA will deal with the partnership debts and the IVA’s with the individual debts of the partners. It will also avoid any partner being made bankrupt as a result of any debts that “cascade” from the partnership to the individual partners following the insolvency of the partnership.