Application for orders convening scheme meeting under s 411(1) of the Corporations Act 2001 (Cth)
Cash scheme
Quick Take
1Where a cash scheme lacks the usual safeguards against performance risk for some shareholders (here, Ghana-register holders paid from a non-trust local account in local currency), the risk may be reduced to an acceptable level for convening purposes by requiring an irrevocable direction for payment of any consideration not paid on the Implementation Date, whatever the reason for the delay and not merely for administrative reasons. This removes the risk of an incoming board interfering with payment. The residual risk is then a matter for full disclosure and for shareholders to decide collectively.
2It is unsurprising, and not of itself objectionable, that transfer of beneficial interest, appointment of the bidder as proxy and change of board control occur once the bidder pays the consideration into a trust account, rather than upon onward payment to each shareholder (applying Mirvac Funds Management Ltd [2014] NSWSC 1569).
3Benefits a shareholder receives under a separate arm's length commercial agreement with the bidder, which is not part of and not conditional on the scheme, do not of themselves create a separate class. On the facts, any collateral-benefit concern was adequately addressed by disclosure and by tagging that shareholder's votes for consideration at the second court hearing.
