MOQ Ltd, in the matter of MOQ Ltd

In the matter of MOQ Ltd, the company sought approval from the Federal Court to convene a meeting of its members to consider and potentially approve a proposed scheme of arrangement. The scheme, if approved, would result in the acquisition of all ordinary shares in the company by Brennan VDI Pty Ltd, leading to the delisting of MOQ from the Australian Securities Exchange. The application was brought under sections 411 and 1319 of the Corporations Act 2001 (Cth). The primary legal issues before the court were whether the scheme was fair and reasonable to the participating shareholders and whether the formal requirements of the Corporations Act were satisfied to convene the meeting.

The court examined the evidence provided by MOQ, including affidavits from MOQ's directors and CEO, an expert report from Lonergan Edwards & Associates, and correspondence with the Australian Securities and Investments Commission. The court considered the strategic benefits and value of the scheme, the terms of the exclusivity arrangements, the reimbursement fee, and the deemed warranty. The court also noted that ASIC did not propose to make any submissions at the hearing nor intervene to oppose the scheme. After reviewing the evidence, the court found that the scheme was fair and reasonable and that the formal requirements of the Corporations Act were met.

Accordingly, the court granted the application and made orders convening a meeting of MOQ's members to consider and potentially approve the proposed scheme of arrangement. The meeting was to be held as a hybrid meeting, both in person and virtually, on November 4, 2022. The court also made orders regarding the distribution of the scheme booklet and proxy forms to the participating shareholders and exempted MOQ from certain advertising requirements. The proceeding was stood over to November 8, 2022, for the hearing of any application to approve the scheme.