Application for orders convening scheme meeting under s 411(1) of the Corporations Act 2001 (Cth)
Whether requirements to order scheme meeting are satisfied
Quick Take
1At the first court hearing for a scheme of arrangement under s 411 of the Corporations Act, the court will order a scheme meeting to be convened if satisfied the scheme is bona fide and properly proposed, the scheme booklet provides proper disclosure, ASIC has had adequate notice, procedural requirements are met, and the scheme is of such a nature that the court would likely approve it if passed by the requisite majority.
2Collateral commercial agreements between the acquirer and a shareholder of the target that do not form part of the scheme itself, and which reflect arm's length negotiations, do not necessarily create separate classes of shareholders, though the court may require the relevant shareholder's votes to be tagged for consideration at the second court hearing.
3An exclusivity period of up to nine months in a scheme implementation deed, while at the upper end of what is considered reasonable, may be acceptable where the transaction involves cross-border elements and the exclusivity provisions contain fiduciary carve-outs.
