In the matter of Ovato Print Pty Ltd

Ovato Print Pty Ltd was a single-member company that applied to the court for approval of a scheme of arrangement under section 411 of the Corporations Act 2001 (Cth). The company sought to obtain ancillary relief under section 413 of the Act, which requires the scheme to be fair and equitable to creditors and members. The primary dispute was whether the assumptions made in the explanatory memorandum of the scheme were sufficient to allow the court to approve the scheme, despite some creditors objecting to the terms of the scheme but not appearing at the hearing.

The legal issues before the court were whether the assumptions made in the explanatory memorandum were reasonable and whether the objections of certain creditors, who did not appear at the hearing, could still be considered. The court was required to determine whether the objections were valid and, if so, whether they were sufficient to prevent the court from approving the scheme.

The court held that the assumptions made in the explanatory memorandum were reasonable and that the objections of the creditors who did not appear at the hearing could still be considered. The court found that the objections raised valid concerns about the fairness and equitability of the scheme, and that the company had not adequately addressed those concerns. The court reserved the question of whether to approve the scheme for a second hearing, pending further submissions from the company.

The court did not make any final orders in this case, as the matter was reserved for a second hearing. The court ordered that the company provide further submissions addressing the objections raised by the creditors, and that the creditors who had not appeared at the hearing be given an opportunity to make their objections known. The outcome of the second hearing will determine whether the court approves the scheme and grants the ancillary relief sought by the company.