Lease-based provider rescued after CVA agreed by creditors

In October 2022, the Charity Commission opened a statutory inquiry into the provider after it found that payments of more than £1m were made to nine of its own trustees over a period of seven years.

In December of the same year, the English regulator downgraded My Space to the lowest possible governance and financial viability grades after its failure to provide evidence was branded “unacceptable”.

A CVA is a legally binding agreement between a business and its creditors that sets out how the company’s debts should be compromised, together with other amendments to the contractual arrangements between the parties.

My Space lodged documents with the court about its proposed CVA in February. 

If the CVA had not been granted, then the provider would have been forced into voluntary liquidation, resulting in an immediate hand back of properties to landlords.

Jim Varley, partner at Devonshires, who acted for My Space, said: “The approval of the CVA means the business is saved and the residents, many of whom are vulnerable, are not impacted in any way.

“The alternative would have been a disaster for residents as landlords would not be able to swiftly find an alternative social housing provider to manage the properties.

“We are delighted to have been able to act for My Space in this matter and to have helped protect the vulnerable residents from a difficult situation.”