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Re Boart Longyear Ltd

Re Boart Longyear Ltd

Case [2017] NSWSC 567 10 May 2017

Schemes of Arrangement

Contract Variation

Director Nomination Rights

Creditor Rights

Disclosure Obligations

Corporate Restructuring

Corporate Law & Governance

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Supreme Court

New South Wales

Summary available

Medium Neutral Citation: In the matter of Boart Longyear Limited [2017] NSWSC 567
Hearing dates: 4 and 5 May 2017
Decision date: 10 May 2017
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
The Court orders pursuant to s 411 of the Corporations Act 2001 (Cth) that the Plaintiffs convene meetings of certain secured creditors and certain unsecured creditors for the purpose of considering and, if thought fit, agreeing to the schemes of arrangement called the Secured Creditor Scheme and the Unsecured Creditor Scheme respectively.

Catchwords: CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Applications under s 411 of the Corporations Act 2001 (Cth) for orders convening meetings of members to consider and if thought fit to agree to proposed schemes of arrangement – where schemes and their conditions precedent provide for recapitalisation and change in control of the companies, waiver of contractual change of control provisions, variation of director nomination rights, and interest rate and maturity date concessions by creditors – whether terms create different classes of creditors – whether adequate disclosure made in explanatory statements – whether requirements to order scheme meetings satisfied
Legislation Cited: - Corporations Act 2001 (Cth), ss 199A, 411–412, 563A(2), 1319
- Corporations Regulations 2001 (Cth)
- Supreme Court (Corporations) Rules 1999 (NSW), rr 2.13, 2.15, 3.2
Cases Cited: - Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485
- Bacnet Pty Ltd v Lift Capital Partners Pty Ltd (in liq) [2010] FCAFC 36; (2010) 183 FCR 384
- Centro Properties Ltd v PricewaterhouseCoopers [2011] NSWSC 1465; (2011) 86 ACSR 584
- F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
- Fowler v Lindholm [2009] FCAFC 125; (2009) 178 FCR 563
- Nicron Resources Ltd v Catto (1992) 8 ACSR 219
- Nordic Bank PLC v International Harvester Australia Ltd [1983] 2 VR 298
- Primacon Holding GmbH v Credit Agricole [2011] EWHC 3476 (Ch); [2013] BCC 201
- Re Amcom Telecommunications Ltd [2015] FCA 341
- Re Aston Resources Ltd [2012] FCA 229
- Re Atlas Iron Ltd [2016] FCA 366; (2016) 112 ACSR 554
- Re Cashcard Australia Ltd [2004] FCA 223; (2004) 48 ACSR 738
- Re Castle Holdco 4 Ltd [2009] EWHC 3919 (Ch)
- Re Central Pacific Minerals NL [2002] FCA 239
- Re Cortefiel SA [2012] EWHC 2998
- Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358
- Re David Jones Ltd (No 2) [2014] FCA 720; (2014) 101 ACSR 381
- Re DUET Finance Ltd [2017] NSWSC 415
- Re Eastern Star Gas Ltd [2011] FCA 1225
- Re Foster’s Group Ltd (No 2) [2011] VSC 547
- Re Foundation Healthcare Ltd [2002] FCA 742; (2002) 42 ACSR 252
- Re Gallery Capital SA (EWHC, unreported, 21 April 2010)
- Re Glencore Nickel Pty Ltd [2003] WASC 18

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 Boart Longyear Ltd

Details

AGLC: Re Boart Longyear Ltd [2017] NSWSC 567
Case: [2017] NSWSC 567
Decision Date: 10 May 2017

CaseChat Overview and Summary

The case involved an application by the administrators of Boart Longyear Limited for orders to convene meetings of the company's members and creditors to consider and vote on proposed schemes of arrangement. The schemes aimed to restructure the company's debt and equity, resulting in a recapitalisation and a change in control. The applicants sought to waive contractual change of control provisions, vary director nomination rights, and obtain concessions from creditors regarding interest rates and maturity dates. The primary legal issues revolved around whether the terms of the proposed schemes created different classes of creditors, whether the explanatory statements provided adequate disclosure, and whether the conditions precedent to convening the meetings had been satisfied.

The court examined the nature of the proposed schemes and their impact on different classes of creditors. It assessed whether the explanatory statements adequately disclosed the material terms of the schemes and the potential effects on the various creditor classes. The court also considered whether the requirements of section 411 of the Corporations Act 2001 (Cth) had been met to order meetings of the company's members and creditors to consider the schemes. The court determined that the explanatory statements provided sufficient disclosure, and the conditions precedent had been met, thereby satisfying the legal requirements for convening the meetings.

In light of the findings, the court granted the administrators' applications and ordered meetings of the company's members and creditors to consider and vote on the proposed schemes of arrangement. The court's decision facilitated the restructuring process, allowing the company to proceed with its recapitalisation and change in control, subject to the approval of the relevant meetings. The final orders included convening the specified meetings, providing the necessary documentation to the members and creditors, and setting a timetable for the meetings and subsequent voting.

Orders