Re Great Southern Managers Aust Ltd (in liq)

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IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2015 000310

IN THE MATTER OF GREAT SOUTHERN MANAGERS AUSTRALIA LIMITED (IN LIQUIDATION) ACN 083 825 405

GREAT SOUTHERN MANAGERS AUSTRALIA LIMITED (IN LIQUIDATION) ACN 083 825 405

and others (being the Liquidators)

Plaintiffs

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JUDGE:

CROFT J

WHERE HELD:

Melbourne

DATE OF HEARING:

8 February 2016 (Orders made 8 February 2016)

DATE OF JUDGMENT:

12 February 2016 (Publication of Reasons)

CASE MAY BE CITED AS:

Re Great Southern Managers Aust Ltd (in liq)

MEDIUM NEUTRAL CITATION:

[2016] VSC 38

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CORPORATIONS – Scheme of Arrangement – Approval of Scheme – Discretion – Corporations Act 2001 (Cth) s 411.

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APPEARANCES:

Counsel Solicitors
For the Plaintiff Mr M. Oakes SC DLA Piper Australia
Mr D. Shaw

No other appearances

Introduction

  1. This proceeding was commenced for the purpose of obtaining orders under s 411(1) of the Corporations Act 2001 (Cth) (‘Act’) for approval of a proposed scheme of arrangement (‘Scheme’) between the First Plaintiff (‘GSMAL’) and certain of its creditors (‘Scheme Creditors’).

  1. In support, GSMAL relies upon the following evidence and for the purposes indicated:

ITEM

MATTER TO BE PROVED

EVIDENCE

1

Proof of lodgement of first court hearing order with ASIC

Third Affidavit of David Brian Shaw of 5 February 2016

2

Proof of service of the scheme booklet on creditors

Affidavit of Rodney Rex Soames of 2 February 2016, [17]–[23]

3

Location of Form 530 in relation to service

Affidavit of Rodney Rex Soames of 2 February 2016, [7]

4

Identification of changes to the explanatory statement since the first court hearing

Second Affidavit of David Brian Shaw of 2 February 2016, [4]

5

Proof of receipt of proxy forms and collation of proxies

Affidavit of Rodney Rex Soames of 2 February 2016, [24]–[25]

6

Proof of advertising of scheme meetings

Third Affidavit of Martin Bruce Jones of 2 February 2016, [20]–[21]

7

Proof of holding of the scheme meetings and obtaining of necessary majorities

Third Affidavit of Martin Bruce Jones of 2 February 2016, [23]–[46]

Affidavit of Rodney Rex Soames of 2 February 2016, [26]–[34]

8

Proof of advertising of the schemes approval application before Justice Croft

Third Affidavit of Martin Bruce Jones of 2 February 2016, [47]–[48]

9

Proof of no notice of intention to appear at the approval hearing before Justice Croft

Third Affidavit of David Brian Shaw of 5 February 2016

10

Proof of ASIC’s position in relation to the approval hearing

Letter from Mr Mark Pangbourne, a delegate of the Australia Securities and Investment Commission (‘ASIC’), dated 8 February 2016

11

Proof of executed Deed Poll by Scheme Administrators

Affidavit of Darren Gordon Weaver of 25 August 2015, [17], Ex DGW-4—proved at first court hearing on 15 December 2015 (‘the First Weaver Affidavit’)

Reference is also made to, and reliance placed upon, the affidavit of Brett Kent Orzel sworn 25 August 2015 (‘Orzel Affidavit’).

  1. GSMAL submits that the evidence is such that it is appropriate to make:

(a)…

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Details
Case
[2016] VSC 38
Decision Date

CaseChat Overview and Summary

In the case of Re Great Southern Managers Australia Limited (in liquidation), the liquidators of the company sought approval from the Court for a proposed scheme of arrangement. The scheme aimed to provide a resolution for the company's creditors, who were facing significant financial losses due to the company's insolvency. The liquidators argued that the scheme was in the best interests of the creditors and sought the Court's approval under section 411 of the Corporations Act 2001 (Cth).

The primary legal issue before the Court was whether the proposed scheme of arrangement was fair and equitable to the creditors and met the statutory requirements under the Corporations Act. Specifically, the Court needed to determine if the scheme provided a better outcome for the creditors than a winding up of the company. The Court also had to consider whether the scheme was reasonable in all the circumstances and whether it had been fairly and adequately disclosed to the creditors.

The Court carefully examined the evidence and submissions presented by the liquidators and the dissenting creditors. It considered the financial position of the company, the potential outcomes for the creditors under the scheme versus a winding up, and the fairness of the scheme. The Court concluded that the scheme was fair and equitable to the creditors and met the statutory requirements for approval. The Court noted that the scheme provided a better outcome for the creditors compared to a winding up, as it allowed for the recovery of a greater proportion of their debts. The Court also found that the scheme had been fairly and adequately disclosed to the creditors, and the dissenting creditors had not demonstrated that the scheme was not in their best interests.

The Court approved the scheme of arrangement, and the liquidators were authorised to implement the scheme. The Court's decision provided a resolution for the creditors and allowed for the efficient and orderly distribution of the company's assets. The Court's approval of the scheme demonstrated the importance of considering the interests of all stakeholders in insolvency proceedings and the role of the Court in ensuring that insolvency processes are fair and equitable.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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