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I don't get it


bede
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I don't really get the whole business side of CVA vs newCo, but the one thing that I have kept reading is that if we take the CVA route, we have to pay creditors back for the debts we owe them, like 1p to the pound or something. If they say no, we go and launch a newCo which will lead to dissolving the old business and any debts. What that says to me is that with a CVA if we owe someone 10m pounds they'll only get 100,000 which isn't much but if we go newCo we pay them nothing, so why would anyone not want us go through CVA?

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I don't really get the whole business side of CVA vs newCo, but the one thing that I have kept reading is that if we take the CVA route, we have to pay creditors back for the debts we owe them, like 1p to the pound or something. If they say no, we go and launch a newCo which will lead to dissolving the old business and any debts. What that says to me is that with a CVA if we owe someone 10m pounds they'll only get 100,000 which isn't much but if we go newCo we pay them nothing, so why would anyone not want us go through CVA?

To make an example of us probably

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I thought if the CVA is turned down, then the assets will be sold and proceeds given to the creditors, so they may get more that way than a CVA?

when the cva gets turned down, CG buys all the assets for the newco.

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when the cva gets turned down, CG buys all the assets for the newco.

And the cash raised for the sale goes to the creditors. The administrators will only take it down the CVA proposal route if they feel the creditors will get a better return than in a pre-pack liquidation.

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And the cash raised for the sale goes to the creditors. The administrators will only take it down the CVA proposal route if they feel the creditors will get a better return than in a pre-pack liquidation.

Does that mean that if the cva is turned down, the assets will go on sale to the highest bidder?

I'm thinking TBK or others might want to put in an offer for the stadium, trademarks etc.

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isn't Whyte guaranteed 18 mill from a newco asset sale whereas in a cva he isn't first choice for cash

I doubt it as the assets will only be transferred for what the preferred bidder pays for them. I reckon this is a figure which is already estimated by the admins.

Does that mean that if the cva is turned down, the assets will go on sale to the highest bidder?

I'm thinking TBK or others might want to put in an offer for the stadium, trademarks etc.

If the preferred bidder has a plan B for a Newco then they will be the purchasers of the assets at a price that has probably already been established between themselves and the admins. This may have been one of the issues the admins had with TBK, in that they weren't willing to have a Plan B and were going soley for a CVA.

But if the consortium couldn't agree a CVA and wanted to walk away it would be a case of assets to the highest bidder.

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