What refers to agreements between a company and its creditors on debt payment proportions?

The correct answer is Company Voluntary Arrangements (CVAs). A CVA is a formal agreement between a company and its creditors that outlines how the company will manage its debts. In such arrangements, a company proposes a plan to repay a proportion of its debts over time, typically offering creditors a fair settlement based on its financial situation. This method allows a company to continue operating while reorganizing its finances under the control of its directors and with the oversight of an insolvency practitioner.

The flexibility of CVAs makes them an attractive option for companies facing financial difficulties, as they can tailor repayment terms to what is manageable. Creditors then have the opportunity to negotiate, and if a sufficient majority agrees, it binds all creditors, even those who did not vote in favor of the arrangement.

In contrast, other options do not serve the same function. For example, a Creditor's Committee is primarily involved in the oversight and representation of creditors' interests during insolvency processes, rather than directly establishing repayment agreements. A Moratorium is a temporary halt on debt enforcement actions, allowing time for restructuring but not addressing the actual debt repayment terms. Liquidation, on the other hand, involves winding up the company’s affairs and distributing its assets to creditors, which does not