We'll cancel membership but we're not ruthless
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CM HAS given prominent coverage on the important issue of company voluntary arrangements (CVAs) in recent weeks, including the cancellation of the Road Haulage Association (RHA) membership of firms entering into CVAs. Cancellation is required by the RHA's Article of Association.
Haulage firms face tough challenges in the present climate: many are suffering and digging deep to trade through them, and we believe that writing off substantial amounts of debt — as happens in a CVA — can put competitors at an unfair disadvantage.
The RHA recognises that circumstances surrounding CVAs vary and it is for that reason that firms have the opportunity to re-apply for membership, setting out the circumstances of their case.
Every application is judged on its merits and the RHA Board, which consists entirely of members, will consider the trading history of the firm, together with a list of unsecured creditors before making a decision.
CVAs, pre-pack administrations and similar arrangements can be the result of operating at unsustainable rates, which undermine fair competition and damage the industry as a whole — a point we have argued repeatedly to the Insolvency Service and others in the debate over pre-packs.
The significant debts that are written off regularly include amounts owed to other hauliers.
We shall also be urging traffic commissioners to thoroughly investigate the financial history of a company that enters into one of the above arrangements to establish at what point the operator failed to meet its financial standing requirements — as it is likely to do when it becomes insolvent — and to investigate the manner by which the company reported that change in circumstances.
Geoff Dunning Chief executive Road Haulage Association