YORK Cocoa Works – the venture which brought chocolate-making back into York city centre – has reached a voluntary agreement with creditors and can stay open after becoming insolvent.

The CVA (Company Voluntary Arrangement) for the Castlegate-based business has been agreed by the vast majority of creditors.

Under UK insolvency law, a limited company which is insolvent can use a CVA to pay creditors over a fixed period, allowing it to continue trading.

Managing director Sophie Jewett said the Cocoa Works remained open for business and had a bright future, and under the arrangement, creditors would be paid all they were owed over five years and also receive a dividend of 50 per cent of all profits.

She said in a letter to creditors and shareholders last month that getting to this stage had "not been without its challenges" but the business had been motivated by the growth and impact it had been able to make. However, at the end of 2019, its position with HMRC had come to a "critical point".

She said the company had been awaiting the completion and return of a series of successful, significant R&D tax credits to off-set against historic arrears, and while it had been in ongoing communications and made significant progress, HMRC had supported its requests for further time and discretion to sort out the issue.

But in early January, the company’s bank had made a commercial decision to restrict its banking access, and the CVA proposal had become necessary.

She said: “I am deeply thankful to the support of all who have made such significant contributions to the vision we set out and am disappointed that we are in a position to put this course forward.”

A notice of voluntary arrangement lodged at the High Court states that meetings of creditors and members took place in York on February 7.

Creditors owed a total of £617,786 - including Sophie Jewett, who was owed £129,943 - voted for acceptance of the CVA proposal. Only two creditors voted against, one of whom was HMRC, which was owed £57,352. Shareholders voted unanimously to approve it.

The Press reported in March 2018 how the Cocoa Works, featuring a cafe, shop and education facility alongside the factory, had opened on the site of a former Job Centre after the transformation of the building after £311,000 had been raised for the project via a crowd funding site.

The opening marked the return of traditional chocolate making to the city centre, which had not had its own cocoa bean roasting process since Craven’s Ebor Confectionery works closed in Coppergate in the 1960s.