INSOLVENCYCompany subject to CVA wound up on petition of non-CVA creditor - CVA and trusts thereunder not determined by making of winding-up order - funds held by supervisor for benefit of CVA creditors onlyIn re Kudos Glass Ltd (in liquidation): ChD (Richard McCombe QC sitting as a deputy High Court judge): 22 November 2000The company entered into a company voluntary arrangement (CVA) with various creditors in October 1993.

In April 1996 the company was compulsorily wound up on the petition of HM Customs & Excise, which was not a party to the CVA.

The supervisor applied to the court for directions, among other things, that the funds held by the applicant as supervisor of the CVA were held subject to that trust and to be applied only for the benefit of creditors bound by the CVA.Edward Francis (instructed by Few & Kester, Cambridge) for the supervisor.

Tina Kyriakides (instructed by Isadore Goldman) for the liquidator.Held, granting the directions sought, that what happened to any undistributed moneys or other assets held in the hands of the supervisor when a voluntary arrangement failed depended primarily upon what the arrangement itself provided; that the CVA was a statutory contract which the court was obliged to interpret even where the arrangement itself was silent; that it had plainly been intended by the makers of the CVA in the present case that, should something go wrong (by way of supervening winding-up order or otherwise) the money harvested up to that time by the CVA creditors was to go to the CVA creditors; that, where the winding-up petition was brought by either the supervisor of the CVA on behalf of the CVA creditors or by one of those creditors, it was clear that the CVA creditors had abandoned the CVA and determined and discharged the trusts arising thereunder; but that the CVA did not come to an end where the company was wound up on the petition of some other creditor, unless it was clear that the supervisor was obliged to petition for the winding up of the company under the terms of the CVA but had failed to do so; that, whilst there had been breaches of the terms of the CVA in the present case, the supervisor was not obliged under its terms to abandon the scheme; and that therefore the trusts created by the CVA in favour of the CVA creditors were not determined.