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ABB Grain Ltd, in the matter of ABB Grain Ltd [2010] FCA 1309

by Martha.Ware 12. April 2011 17:03

Facts

 

This case concerned an application for an order under s 411(1) of the Corporations Act 2001 (Cth) that a meeting of the appellant’s members be convened to consider a scheme of arrangement between the company and its members involving the company becoming wholly owned subsidiary of another company and, should such order be made, for approval of an explanatory statement to accompany the notice of the meeting. There was a subsequent application for approval of the scheme of arrangement under s 411(4) of the Act.

 

Outcome

 

The application was granted and initial orders made to convene a meeting of shareholders and to approve the explanatory statement. An order was later made approving the scheme.

 

With regard to s 411(1) considerations, the court was satisfied that:

o       The scheme of arrangement was likely to be approved by the court if statutory majority of members approved the arrangement;

o       independent expert opinion was that offer was fair and reasonable and in best interest of members;

o       members would receive sufficient information to asses SOA;

o       ASIC had reasonable opportunity to examine SOA and make submissions;

o       scheme shareholders were adequately protected against any credit or performance risk: [27] – [33];

o       deemed warranty not a reason to refuse order under s 411(1): [34] – [39];

o       scheme shareholders were adequately informed about no shop and no talk provisions which were not unreasonable: [40] – [48]

o       the break fee was not of such magnitude that it could influence the voting: [49] – [58].

 

With regard to s 411(4) considerations, the court was satisfied that:

o       the procedural matters relating to meeting of shareholders to consider SOA had been complied with;

o       member had approved SOA with the required majority;

o       the SOA was fair and reasonable; and

o       remaining requirements of CA had been satisfied: [73] – [86].

 

Relevant paragraphs of Ford

[24.060], [24.071], [24.150], [24.160]

Tags:

Ford's Principles of Corporations Law



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