Business Law and Practice
A self-employed individual has received advice from an insolvency practitioner to consider entering into an Individual Voluntary Arrangement (IVA). The individual currently has unsecured debts to the following creditors:
- £1,000 to Creditor 1
- £2,000 to Creditor 2
- £11,000 to Creditor 3
- £25,000 to Creditor 4
To approve the IVA proposals, creditors owed money must vote in favor.
Which of the creditors listed above must vote in favor of the proposals for the IVA to be approved?
A self-employed individual has received advice from an insolvency practitioner to consider entering into an Individual Voluntary Arrangement (IVA). The individual currently has unsecured debts to the following creditors:
- £1,000 to Creditor 1
- £2,000 to Creditor 2
- £11,000 to Creditor 3
- £25,000 to Creditor 4
To approve the IVA proposals, creditors owed money must vote in favor.
Which of the creditors listed above must vote in favor of the proposals for the IVA to be approved?
Creditors 3 and 4.
(C) For an IVA to be approved, the debtor's unsecured creditors, who hold at least 75% of unsecured debt, must agree to it. If this approval is obtained, the proposals made by the practitioner become binding on every ordinary unsecured creditor who was notified of the meeting. To reach the 75% threshold, creditors 3 and 4 are required.
203 of 230