Re Atlas Iron Ltd (No 2)

In the case of Re Atlas Iron Ltd (No 2), the Federal Court of Australia was tasked with approving a proposed scheme of arrangement between Atlas Iron Limited, its lenders under a Syndicated Facility Agreement dated 10 December 2012, and certain holders of subordinate claims against Atlas. The Court had to determine whether to exercise its discretion to approve the scheme, considering factors such as compliance with previous orders, statutory majorities, fairness, and disclosure. The legal issues included whether Atlas complied with the Court's orders convening the scheme meeting, whether the resolution to approve the scheme was passed by the requisite majority, and whether the scheme was fair and reasonable.

The Court found that Atlas complied with the orders convening the scheme meeting, including the dispatch of the scheme booklet to the lenders and the holding of the scheme meeting. The statutory majority was achieved, and there was no criticism of the disclosure provided to the lenders. The Court also considered that the scheme was fair and reasonable, as it did not usurp the decision of the relevant class by imposing its own commercial judgment on the scheme. Given these findings, the Court exercised its discretion to approve the scheme, making orders pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth).

The Court concluded that Atlas had fulfilled the necessary requirements for the approval of the scheme and granted the approval, noting that Atlas would rely on the Court's approval for exemption from the registration requirements of the Securities Act of 1933 (US). The Court also exempted Atlas from compliance with s 411(11) of the Corporations Act.