Re CIC Australia Ltd (No 2)

The case of Re CIC Australia Ltd (No 2) involved the approval of a scheme of arrangement proposed by CIC Australia Ltd, a company in financial distress. The matter was heard in the Supreme Court of Queensland. The dispute centred on whether the procedural requirements for the approval of the scheme were met, whether the scheme itself was reasonable, and whether it unfairly treated minority shareholders or prejudiced the company’s ability to pay its creditors.

The primary legal issues before the court were whether the requisite majority of creditors had approved the scheme in accordance with the Corporations Act 2001 (Cth), and whether the scheme was fair and reasonable. The court had to determine if the procedural pre-requisites for approval were satisfied, including the approval by the requisite majority at a creditors’ meeting, the fairness of the scheme to all parties, and the absence of opposition from the Australian Securities and Investments Commission (ASIC).

The court found that the procedural requirements for the approval of the scheme had been met, as the majority of creditors had approved the scheme. It was also satisfied that the scheme was reasonable and did not unfairly treat minority shareholders or prejudice the company’s ability to pay its creditors. The absence of opposition from ASIC further supported the approval of the scheme. The court concluded that the scheme provided a viable means of restructuring the company’s financial obligations and ensuring its continued operation.

The court approved the scheme of arrangement proposed by CIC Australia Ltd, thereby allowing the company to proceed with the restructuring as outlined in the scheme. This decision provided a clear path for the company to address its financial difficulties and maintain its operations.