ManageSoft Corporation Limited

[2003] FCA 905

FEDERAL COURT OF AUSTRALIA

ManageSoft Corporation Limited [2003] FCA 905

Corporations Act 2001 (Cth) s 411

IN THE MATTER OF MANAGESOFT CORPORATION LIMITED 
(ABN 40 052 412 156)
N 3030 of 2003

GYLES J
13 AUGUST 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 3030 OF 2003

IN THE MATTER OF MANAGESOFT CORPORATION LIMITED
(ABN 40 052 412 156)

MANAGESOFT CORPORATION LIMITED

(ABN 40 052 412 156)
Plaintiff

JUDGE:

GYLES J

DATE OF ORDER:

13 AUGUST 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth), the scheme of arrangement between ManageSoft Corporation Limited (ABN 40 052 412 156) (“MCL”) and the holders of MCL shares, in the form of Annexure A hereto, be approved.

2.Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth), the scheme of arrangement between ManageSoft Corporation Limited (ABN 40 052 412 156) (“MCL”) and the holders of MCL options, in the form of annexure B hereto, be approved.

3.Pursuant to s 411(12) of the Corporations Act 2001 (Cth), MCL be exempted from compliance with s 411(11) of the Corporations Act 2001 (Cth).

4.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	N 3030 OF 2003

IN THE MATTER OF MANAGESOFT CORPORATION LIMITED
(ABN 40 052 412 156)

MANAGESOFT CORPORATION LIMITED
(ABN 40 052 412 156)
Plaintiff

JUDGE:	GYLES J
DATE:	13 AUGUST 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 1 July I made orders convening meetings of both shareholders and option holders of ManageSoft Corporation Limited for the purpose of considering a scheme of arrangement proposed between the company and respectively its members and option holders. 

2. I am satisfied that the meetings were duly convened in accordance with those orders and with the statutory requirements. I am satisfied that the arrangement was agreed to in respect of each category, that is, members and option holders, in accordance with s 411(4). I am satisfied that the formalities required for advertising this hearing have been complied with. I am satisfied that there is a statement in writing from the Australian Securities and Investments Commission which satisfies s 411(17). I am satisfied that the mechanics necessary for implementation of the scheme have occurred, and I note that at the time I convened the meetings I took some care to scrutinise those mechanics.

3. Counsel has drawn to my attention that, in the evidence, it appears that there was late lodgement of a form in relation to reduction of capital, but I am satisfied that that does not affect the validity of the scheme or the proceedings and that the effect of it is not such as to cause the exercise of any discretion against approval for the schemes.

4. I have been provided by counsel with a check list of what needs to be proved, and what has been proved, and I am satisfied with the accuracy of that list. 

5. On the occasion I convened the schemes, I said this:

   ‘The commercial rationale for this restructure is set out in the explanatory booklet which incorporates an independent report and tax and legal advice as to the consequences of the change.  This should enable shareholders and option holders to assess where their best interests lie.’

6. The independent report to which I referred was prepared by KPMG Corporate Finance Australia Pty Limited, and there was evidence led by the officer of that company who was primarily responsible for the report.  The company has a high reputation and he proved his qualifications.  A summary of the conclusions is as follows:

   ‘In our opinion, on balance, the proposed scheme is in the best interests of the ordinary shareholders and option holders of MCL.  This reflects the fact that the company's shares currently have a nil value, the company needs fresh capital to continue as a going concern and being established as a US based company potentially enhances the prospects of capital being raised.’

   Having regard to that report, and the associated expert reports to which I referred, I was satisfied that the shareholders and option holders were well able to judge the fairness of the scheme so far as they were concerned.  There is no doubt that the independent report and that expert advice was consistent with the scheme being fair so far as the shareholders and option holders of ManageSoft Corporation Limited are concerned.

7. In the events which have happened, the schemes commanded a very high rate of acceptance by shareholders, and unanimous acceptance by option holders.  This, together with the fact that there is no shareholder or option holder who appears here today to oppose the scheme, would indicate to me that the shareholders and option holders accept that this arrangement is fair.

8. I have been informed by counsel that the orders that I propose to make, and the reasons I have given, may be utilised in the United States for the purposes of the Securities Act 1933. 

9. I therefore make orders in accordance with the short minutes of order which I have signed and placed with the papers which approve each scheme.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated:             28 August 2003

Counsel for the Plaintiff:	M Oakes SC
Solicitor for the Plaintiff:	Gilbert and Tobin
Date of Hearing:	13 August 2003
Date of Judgment:	13 August 2003