A company voluntary arrangement or CVA is an insolvency process under the UK Insolvency Act whereby a company and its creditors agree to restructure its debts by, for instance, reducing the debt amounts owed to unsecured creditors or renegotiating lease agreements to reduce expenses. Under this arrangement, the directors remain in control of the company and there is little court involvement throughout the process.

A CVA can be used to restructure unsecured debts even if they're not in favor of this. In other words, the CVA binds the deal to all unsecured creditors, including dissenting parties. A CVA can't restructure secured or preferential creditors without their consent, but it can be used in conjunction with other restructuring tools such as a restructuring plan. CVAs are a common way to restructure leasehold obligations to landlords so that companies can rightsize their store's footprint and review rent payments. It's a level of operating activity decline. This is especially useful for companies in the retail sector, which rely considerably on leasehold property to operate their store locations. All unsecured creditors organized as a single class need to vote on the CVA proposal to be approved. It needs to be accepted by 75% by value of the unsecured creditors who are participating in the vote, and 50% of unconnected unsecured creditors. Note that most creditors are unconnected to the company. Examples of connected creditors include intercompany or shareholder loans. Back in 2020, when the Covid 19 pandemic forced restaurants to close due to lockdowns casual dining company, the restaurant group had to use a CVA to shut 125 of its restaurants that were on unfavorable lease terms, all that were unprofitable and renegotiated more favorable rent terms on 85 other sites, the deal was approved by more than 82% of all creditors and 65% of unconnected creditors. The rationale behind the deal was that a CVA was preferable to creditors as the other alternative. A company insolvency and liquidation would not yield significant recoveries for them.