In the matter of Infinite Water Holdings Limited (subject to deed of company arrangement)

Infinite Water Holdings Limited, a company in voluntary administration, was the subject of an application by two of its shareholders, seeking leave under section 444GA of the Corporations Act 2001 to transfer their shares in accordance with a deed of company arrangement (DOCA). The shareholders contended that their rights were unfairly prejudiced as a result of the DOCA. The application was heard by the Federal Circuit Court of Australia.

The central legal issue before the court was whether the residual equity in the company would be diluted by the transfer of the shareholders' shares, and whether such dilution would unfairly prejudice the shareholders. The shareholders argued that the transfer would result in a substantial reduction of their equity and, consequently, they would be unfairly prejudiced.

The court considered the specific terms of the DOCA and the effect of the proposed share transfer on the residual equity. It determined that the transfer would not result in a dilution of the residual equity to the point of unfairly prejudicing the shareholders. The court found that the shareholders' rights were not unfairly prejudiced, and the application was dismissed.

No further orders were made by the court.