CVAs rise again as hauliers work to rescue businesses
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ch ris.t inda Ittarhi.co u k COMPANY VOLUNTARY Arrangements (CVAs) in the transport sector rose again in the third quarter of 2010, reflecting an increasing desire for struggling operators and their creditors to reach a compromise.
Insolvency Service (IS) figures show that eight companies in the sector entered into a CVA between July and September, up from seven in 02 and six in Ql.
This compares with six in the first three quarters of 2009, a rise of 250%. In comparison, the overall number of CVAs in all industries dropped by almost a third in the third quarter, from 232 to 159.
The IS statistics also reveal that compulsory liquidations in transport fell for the fourth consecutive quarter to 19.
Richard Fleming, UK head of restructuring at KPMG, says the increase in CVAs "demonstrates a concerted effort by transport companies to resolve their financial problems by working with their creditors to find a mutually acceptable course of action".
He adds:"We strongly support CVAs as we believe they offer businesses and their creditors an opportunity to find a compromise that poses the least threat to the continued operations of the business.
"While administrations will always be an important tool in the insolvency practitioner's box, we believe it should be a lastresort option."