In the matter of Tribeca Learning Limited (ABN 16 084 211 423)
[2006] FCA 356
•27 MARCH 2006
FEDERAL COURT OF AUSTRALIA
In the matter of Tribeca Learning Limited (ABN 16 084 211 423)
[2006] FCA 356CORPORATIONS – scheme of arrangement – first court hearing – orders made to convene meeting of members
Corporations Act2001 (Cth) – s 411
Tempo Services Limited (2005) 53 ACSR 523 referred to
IN THE MATTER OF TRIBECA LEARNING LIMITED (ABN 16 084 211 423)
NSD 524 of 2006JACOBSON J
27 MARCH 2006
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 524 of 2006
TRIBECA LEARNING LIMITED (ABN 16 084 211 423)
PLAINTIFF
(IN THE MATTER OF TRIBECA LEARNING LIMITED)
JUDGE:
JACOBSON J
DATE OF ORDER:
27 MARCH 2006
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Pursuant to section 411(1) of the Corporations Act 2001 (Cth):
(a)the Plaintiff ('Tribeca') convene a meeting of its shareholders for the purpose of considering and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between Tribeca and its shareholders (‘the Scheme’), being the scheme substantially in the form of the draft contained in Appendix 3 of the booklet containing the explanatory statement in relation to the Scheme, being Exhibit A (‘the Explanatory Memorandum’);
(b)the meeting referred to in subparagraph (a) ('Meeting of Shareholders') be held on 5 May 2006 at the Macquarie Graduate School of Management, CBD Campus, Level 6, 51-57 Pitt Street, Sydney 2000, in the state of New South Wales at 9:30am;
(c)Donald Stammer, or failing him, Adam Davis be chairperson of the Meeting of Shareholders;
(d)the chairperson appointed to the Meeting of Shareholders has the power to adjourn the meeting in his absolute discretion;
(e)the explanatory statement in the Explanatory Memorandum be approved for distribution to Tribeca shareholders; and
(f)the Explanatory Memorandum to be despatched to each of the shareholders of Tribeca be in the form or to the effect of Exhibit A and may be posted by pre-paid post, in the case of a shareholder of Tribeca whose registered address is outside the country by pre-paid post or despatched by air courier for overseas pre-paid post.
2.Regulations 5.6.12 and 5.6.14 to 5.6.36A of the Corporations Regulations shall not apply to the Meeting of Shareholders.
3.Tribeca publish a Notice of Hearing of any application to approve the Scheme in the form of Annexure 'A' hereto no later than 28 April 2006 and Tribeca is relieved from compliance with Rule 3.4 of the Federal Court (Corporations) Rules 2000 to the extent necessary.
4.This proceeding be stood over to 9 May 2005 at 10.15am before Justice Jacobson for the hearing of any application to approve the Scheme.
5.There be liberty to restore on 2 days' notice.
6.These Orders be entered forthwith.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 524 of 2006
TRIBECA LEARNING LIMITED (ABN 16 084 211 423)
PLAINTIFF
(IN THE MATTER OF TRIBECA LEARNING LIMITED)
JUDGE:
JACOBSON J
DATE:
27 MARCH 2006
WHERE MADE:
SYDNEY
REASONS FOR JUDGMENT
This is the first court hearing of an application to approve a Scheme of Arrangement.
The originating process, filed on 13 March 2006, seeks orders convening a meeting of members to consider a members Scheme of Arrangement. The scheme involved is an acquisition of transfer scheme which utilises Part 5.1 of the Corporations Act2001 (Cth) (“the Act”). The proposal is that the scheme shareholders shares are transferred in consideration for 40.5 cents cash per share to Kaplan Australia Pty Limited (“Kaplan”).
Kaplan is a subsidiary of Kaplan Inc which is in turn a subsidiary of the Washington Post Company which is publicly listed on the New York Stock Exchange.
The scheme consideration is approximately $55 million with a maximum consideration of just less than $56.7 million.
Mr Oakes SC of counsel has provided me with helpful written submissions in support of his application for an order convening a meeting. It is unnecessary to refer to the submissions in any detail but I will leave the submissions with the court papers.
Today's application is supported by a number of affidavits as follows; Mr David Mackay sworn 13 March 2006, Mr Warren Jacobson sworn 23 March 2006, Mr Wayne Lonergan sworn 22 March 2006, Mr D.W. Stammer sworn 17 March 2006, Mr A.B. Davis sworn 23 March 2006 and Mr Hal Jones sworn 22 March 2006.
A number of exhibits to those affidavits have also been put in evidence; they are exhibit WJ1 to Mr Jacobson's affidavit, exhibits HJ1, HJ2 and HJ3 to Mr Jones' affidavit and exhibit WRL2 to Mr Lonergan's affidavit.
Also in evidence is a letter from ASIC dated 24 March 2006 which sets out ASICs policy in relation to the provision of a letter under s 411(17) of the Act. The policy referred to in the letter is that the “s 411(17) letter” is not provided until the second court hearing.
One of the matters raised by Mr Oakes' submission is what I can call the “credit risk issue" which arises from the necessary lead time before the payment of the cash consideration. I am satisfied that the scheme adopts a version of the model which was approved by Gyles J in Re Tempo Services Limited (2005) 53 ACSR 523. I note also that the evidence includes a letter from the Washington Post Company dated 10 March 2006 in which that company unconditionally undertakes to Kaplan to provide Kaplan with the scheme consideration.
One other matter which I raised with Mr Oakes is that the scheme provides for a takeover of the scheme company which could have proceeded under the provisions of Chapter 6 of the Act.
In Ford's Principles of Corporations Law at [24.060] the authors set out the authorities which have considered this question. The authors conclude that the effect of the cases is to preserve the availability of the Scheme of Arrangement procedure to achieve a friendly takeover offer notwithstanding s 411(17) as long as the scheme includes essential elements which could not be achieved under Chapter 6.
In the present case there does not appear to be such essential elements, however, the letter from ASIC which is exhibit B indicates that ASIC does not at present have any intention of opposing the orders which would be sought at the second court hearing, and Mr Oakes has indicated that he anticipates that they will produce to the court on the second court hearing a statement in writing by ASIC in accordance with s 411(17)(b) so that it would appear unlikely that any issue in relation to this section will arise at the second court hearing.
I am satisfied that the evidence referred to in the affidavits mentioned above is in accordance with the usual practice taken into account by a court in exercising its discretion to order the convening of a meeting under s 411. I am also satisfied that the draft short minutes of order incorporate the usual practice. The drafting protocols of the applicable orders are usefully summarised in [31] of Mr Oakes' written submissions.
Accordingly, I propose to and I will make orders in accordance with [1] to [6] of the short minutes of order which I will sign and date with today's date and place with the papers.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.
Associate:
Dated: 4 April 2006
Counsel for the Applicant:
Mr M Oakes SC
Solicitor for the Applicant:
Minter Ellison
Date of Hearing:
27 March 2006
Date of Judgment:
27 March 2006
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