Re Bulong Nickel Pty Ltd

Re Bulong Nickel Pty Ltd involved a scheme of arrangement aimed at restructuring a group of companies. The primary dispute was whether meetings of creditors should be convened as part of this reconstruction, particularly considering the involvement of foreign creditors and a debenture stipulating the jurisdiction of the New York courts and the application of New York law. The case was heard in the Supreme Court of New South Wales. The central legal issues revolved around the factors that should be considered when deciding to convene meetings of creditors in such a scenario, the potential applicability of section 411 of the Corporations Act, and the significance of the uncertainty regarding the effect of the proposed scheme on these meetings.

The court examined whether the presence of foreign creditors and the choice of New York law and jurisdiction influenced the decision to convene meetings of creditors. It considered the implications of section 411 of the Corporations Act, which allows the court to approve a scheme if it is fair and equitable to all parties, even if some creditors do not vote in favour of it. The court also deliberated on the significance of the uncertainty surrounding the scheme's effect on the decision to proceed with the meetings of creditors. Ultimately, the court determined that despite these complexities, the scheme's benefits to the overall group justified convening the meetings.

The Supreme Court concluded that the scheme was fair and equitable, taking into account the best interests of all creditors, including the foreign ones. The court authorised the convening of the creditors' meetings, subject to certain conditions, and granted orders to approve the explanatory statement. However, the court reserved the right for the Australian Securities and Investments Commission to object to or oppose the scheme based on new information or developments that might arise during the meetings. This decision balanced the need for corporate restructuring with the protection of creditor interests, ensuring that the scheme's fairness was rigorously assessed.