Re Asaleo Care Limited (No 2)

The case of Re Asaleo Care Limited (No 2) involved an application by Asaleo Care Limited to approve a scheme of arrangement under Section 411(4)(b) of the Corporations Act 2001 (Cth). The primary legal issue was whether the scheme of arrangement was fair and reasonable, and if all statutory requirements had been met for the court to approve it. This included verifying whether proper disclosure was made to shareholders, if the requisite majority had approved the scheme, and whether all conditions precedent had been satisfied or waived. The application was supported by affidavits from various individuals, including special counsel, the returning officer, and an independent non-executive director, all of whom attested to the proper convening and conduct of the scheme meeting and the fairness of the scheme.

The court considered several factors in deciding whether to approve the scheme, including compliance with the court's orders, the requisite majority approval by shareholders, and the fairness and reasonableness of the scheme. The court was satisfied that the scheme met all statutory requirements and that shareholders had been properly informed, evidenced by ASIC's registration of the scheme booklet and the lack of any opposition. The court noted that the scheme did not alter the constitution of Asaleo or the rights of shareholders, creditors, or other persons dealing with the company, and that there was no ongoing purpose for requiring the orders to be annexed to the company's constitution.

The court concluded that the scheme was fair and reasonable and approved the scheme of arrangement. The orders granted included the approval of the scheme as presented in the scheme booklet, an exemption from compliance with Section 411(11) of the Corporations Act, and the entry of these orders forthwith. This decision was grounded in the well-established principles that the court should not substitute its commercial judgment for that of the shareholders if the scheme has been properly approved by a majority.