4.Company rescues can be made more difficult or can be thwarted because of the absence of provision in the Insolvency Act 1986 for obtaining a short moratorium in the company voluntary arrangement procedure whilst a proposal for a voluntary arrangement is being considered.
5.The absence of a moratorium means that, until the arrangement is formally approved, any creditor can take legal action against the assets of the company and so jeopardise the prospects of the voluntary arrangement succeeding.  The addition of an optional moratorium to this procedure will offer the management of a small company a short time within which to put a rescue plan to creditors.
6.In the last three years an average of 500 company voluntary arrangements have been agreed annually.
Background Moratorium in company voluntary arrangements