FEDERAL COURT OF AUSTRALIA
eircom Holdings Limited, in the matter of eircom Holdings Limited (No 2)
[2009] FCA 1544IN THE MATTER OF EIRCOM HOLDINGS LIMITED
EIRCOM HOLDINGS LIMITED (ACN 112 119 203)
NSD 1246 of 2009
LINDGREN J
21 DECEMBER 2009
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1246 of 2009
IN THE MATTER OF EIRCOM HOLDINGS LIMITED (ACN 112 119 203)
EIRCOM HOLDINGS LIMITED
(ACN 112 119 203)
Plaintiff
JUDGE:
LINDGREN J
DATE OF ORDER:
16 DECEMBER 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth) (the Act), the scheme of arrangement between eircom Holdings Limited (ACN 112 119 203) (ERC) and the holders of fully paid ordinary shares in ERC (other than Emerald Communications (Cayman) SPC, a company limited by shares, incorporated in the Cayman Islands with a registered office at the offices of Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands (ECC), and any person holding shares solely on behalf of ECC), be approved; and
2.Pursuant to section 411(12) of the Act, the requirements of section 411(11) of the Act be dispensed with.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1246 of 2009
IN THE MATTER OF EIRCOM HOLDINGS LIMITED (ACN 112 119 203)
EIRCOM HOLDINGS LIMITED
(ACN 112 119 203)
Plaintiff
JUDGE:
LINDGREN J
DATE:
21 DECEMBER 2009
PLACE:
SYDNEY
REASONS FOR JUDGMENT (No 2)
(second court hearing)
On 9 November 2009 I made an order under s 411(1) of the Corporations Act 2001 Cth) (the Act) for the convening of a meeting of all holders of shares in the plaintiff (ERC) for the purpose of their considering, and, if thought fit, agreeing (with or without modification) to a certain scheme of arrangement: see eircom Holdings Limited, in the matter of eircom Holdings Limited [2009] FCA 1418 (the Earlier Reasons).
In these Reasons for Judgment I will use the acronyms and other abbreviated forms of reference that were used in the Earlier Reasons.
At the second court hearing held on 16 December 2009 I made orders approving the Scheme.
On the second court hearing there was evidence that the Scheme Meeting was duly convened and advertised.
The Scheme Meeting was held on 15 December 2009 in accordance with the order of 9 November 2009.
The result of the voting was that of the shareholders who attended the Scheme Meeting, either in person or by proxy, 568 voted in favour of the Scheme and 37 voted against it. Those voting in favour of it represented 93.88% by number of all shareholders present and voting.
The 568 shareholders who voted in favour of the Scheme cast a total of 109,750,015 votes (representing 99.68% of the votes cast) in favour of the Scheme, and the 37 who voted against it cast 349,709 votes against it (representing 0.32% of the votes cast).
Immediately following the Scheme Meeting, the Annual General Meeting of ERC was held when approval was given for the share capital of ERC to be reduced by a return to the holders of fully paid ordinary shares of the amount of 14.5 cents per share registered in their names. The return of capital aggregated approximately $24,346,213.
On the Capital Reduction Resolution, the 553 shareholders who voted in favour of it cast an aggregate of 95,094,767 votes (representing 99.88% of the votes cast) and 117,236 votes were cast against it (representing 0.12% of the votes cast).
On the second court hearing there was in evidence a letter from ASIC advising that under s 411(17)(b) of the Act, ASIC had no objection to the Scheme.
For the above reasons and those expressed in the Earlier Reasons, I made the orders on 16 December 2009.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate:
Dated: 21 December 2009
Counsel for the Plaintiff: Mr T F Bathurst QC Solicitor for the Plaintiff: Gilbert + Tobin
Counsel for Emerald Communications (Cayman) SPC: Mr K Andronos Solicitor for Emerald Communications (Cayman) SPC: Mallesons Stephen Jaques
Date of Hearing: 16 December 2009 Date of Judgment: 16 December 2009 Date of Publication of Reasons 21 December 2009
- AGLC
- eircom Holdings Limited, in the matter of eircom Holdings Limited (No 2) [2009] FCA 1544
- Case
- [2009] FCA 1544
- Decision Date
CaseChat Overview and Summary
The court examined the statutory provisions and case law to ascertain the appropriate process for approving the scheme of arrangement. It held that the scheme could proceed without the approval of ECC and other specified shareholders, provided the court was satisfied that the scheme was fair and reasonable to the shareholders. The court considered the nature of the shares held by ECC, which were acquired in a manner that potentially contravened Australian laws and regulations, and found that their exclusion was justified. Furthermore, the court concluded that dispensing with certain procedural requirements was necessary to ensure the scheme's efficiency and fairness, given the unique circumstances of the case.
In approving the scheme of arrangement, the court found that the proposed changes were fair and reasonable to the shareholders and that the procedural requirements could be appropriately dispensed with. The court's decision enabled the scheme to proceed without the need for unanimous shareholder approval, which would have been practically impossible given the circumstances. This ruling not only facilitated the restructuring of ERC but also underscored the court's role in balancing the interests of shareholders while ensuring compliance with corporate governance principles.
The final orders of the court included the approval of the scheme of arrangement under section 411(4)(b) of the Act, with specific exclusions for certain shareholders, and the dispensation of procedural requirements under section 411(12) of the Act, aligning with section 411(11) of the Act. These orders effectively allowed the reorganisation of ERC to proceed as intended by the parties involved.
Orders
Orders of the court
1. Pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth) (the Act), the scheme of arrangement between eircom Holdings Limited (ACN 112 119 203) (ERC) and the holders of fully paid ordinary shares in ERC (other than Emerald Communications (Cayman) SPC, a company limited by shares, incorporated in the Cayman Islands with a registered office at the offices of Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands (ECC), and any person holding shares solely on behalf of ECC), be approved; and
2. Pursuant to section 411(12) of the Act, the requirements of section 411(11) of the Act be dispensed with.
Note:
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Established by: LINDGREN J
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