The three-step test for class composition in schemes of arrangement requires identifying: (1) the existing rights of creditors and their differences; (2) the extent to which those rights are differently affected by the scheme; and (3) whether the differences make it impossible for creditors to consult together with a view to their common interest. Where the only alternative to the scheme is insolvency, the relevant comparator is the creditors' rights in an insolvent liquidation, and what must be compared is the bundle of rights held by each creditor assessed in context. Associated transactions that are conditions precedent to a scheme are relevant to class composition where they are closely connected with a creditor's participation in the scheme, even if not technically implemented by the scheme itself.
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