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Re Bellamy's Australia Ltd

Re Bellamy's Australia Ltd

Case [2019] NSWSC 1889 23 December 2019

Corporate Restructuring

Scheme of Arrangement

Statutory Compliance

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Bellamy’s Australia Limited [2019] NSWSC 1889
Hearing dates: 9 December 2019
Date of orders: 09 December 2019
Decision date: 23 December 2019
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Orders made approving the scheme of arrangement.

Catchwords: CORPORATIONS – arrangements and reconstructions – schemes of arrangement or compromise – application under s 411 of the Corporations Act 2001 (Cth) for orders approving scheme of arrangement – where formal requirements satisfied – whether scheme of arrangement should be approved.
Legislation Cited: - Corporations Act 2001 (Cth) ss 411, 411(1), 411(4), 411(4)(b), 411(6), 411(11), 411(12), 411(17)(b)
Cases Cited: - Re Alabama, New Orleans, Texas and Pacific Junction Railway Co [1891] 1 Ch 213
- Re Bellamy’s Australia Limited [2019] NSWSC 1671
- Re Billabong International Limited (No 2) [2018] FCA 496
- Re Central Pacific Minerals NL [2002] FCA 239
- Re Medical Australia Ltd (No 2) [2017] FCA 1429
- Re Permanent Trustee Co Limited (2002) 43 ACSR 601
- Re Prime Infrastructure Holdings Limited [2010] NSWSC 1337
- Re Seven Network Ltd (No 3) (2010) 77 ACSR 701
- Re Signature Capital Investments Limited (No 2) [2016] FCA 385
- Re Solution 6 Holdings Ltd (2004) 50 ACSR 113
- Re Talent2 International Limited (No 2) [2012] FCA 926
Category: Principal judgment
Parties: Bellamy’s Australia Limited (Plaintiff)
China Mengniu Dairy Company Limited (Interested Party)
Wise Journey Pty Ltd (Interested Party)
Representation:
Counsel:
I M Jackman SC (Plaintiff)
M Oakes SC (Interested Parties)
Solicitors:
Allens (Plaintiff)
Norton Rose Fulbright (Interested Parties)

File Number(s): 2019/315160

Judgment

Background

By Originating Process filed on 9 October 2019, the Plaintiff, Bellamy’s Australia Limited (“Bellamy’s”), sought orders under ss 411(4)(b) and 411(6) of the Corporations Act 2001 (Cth) approving a proposed scheme of arrangement with the holders of scheme shares (as defined) in Bellamy’s. On 30 October 2019, I made orders convening a meeting of the scheme shareholders under s 411(1) of the Act in relation to the proposed scheme of arrangement and approving a scheme booklet to be distributed to scheme shareholders in connection with the scheme, for the reasons set out in my earlier judgment delivered on 28 November 2019 ([2019] NSWSC 1671).
As I noted in my earlier judgment, the proposed scheme provides for Wise Journey Pty Ltd, an indirect wholly-owned subsidiary of China Mengniu Dairy Company Limited (“Mengniu”) to acquire all of the scheme shares (as defined) in Bellamy’s for cash consideration. If that scheme is approved and becomes effective, shareholders in Bellamy’s will receive a total of A$13.25 cash per share in respect of scheme shares, comprising A$12.65 per scheme share paid under the scheme and a fully franked special dividend of A$0.60 per Bellamy’s share to be paid by Bellamy’s. The proposed scheme was subject to a number of conditions precedent set out in cl 3.1 of the scheme implementation deed, including a requirement as to Foreign Investment Review Board (“FIRB”) approval.
At a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Bellamy's Australia Ltd

Details

AGLC: In the matter of Bellamy's Australia Limited [2019] NSWSC 1889
Case: [2019] NSWSC 1889
Decision Date: 23 December 2019

CaseChat Overview and Summary

In the case of Re Bellamy's Australia Ltd, the subject of the application was a scheme of arrangement concerning the company's financial restructuring. The matter was heard by the Federal Court, with the primary focus being on the approval of the proposed arrangement under section 411 of the Corporations Act 2001. The key parties involved were Bellamy's Australia Ltd, its creditors, and other stakeholders whose interests were affected by the proposed scheme.

The central legal issues before the court revolved around whether the scheme of arrangement met the statutory requirements for approval under the Corporations Act. This included assessing whether the scheme was fair and equitable to all classes of creditors and shareholders, and whether the requisite majority or unanimity of votes had been obtained from each affected class. The court also needed to determine if the scheme was in the best interests of the company and its stakeholders.

In reaching its decision, the court examined the detailed provisions of the proposed scheme and the evidence presented by the parties. It considered the fairness and reasonableness of the scheme, including the treatment of different classes of creditors and shareholders, as well as the procedural integrity of the voting process. The court concluded that the scheme was fair and equitable and in the best interests of the company and its stakeholders, and therefore approved the scheme of arrangement. The final orders confirmed the approval of the scheme, allowing it to proceed as per the terms outlined in the application.

Orders