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Re Isentia Group Ltd

Re Isentia Group Ltd

Case [2021] NSWSC 1069 25 August 2021

Corporate Restructuring

Schemes of Arrangement

Approval of Schemes

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Isentia Group Limited [2021] NSWSC 1069
Hearing dates: 20 August 2021
Date of orders: 20 August 2021
Decision date: 25 August 2021
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), s 411

Cases Cited:
- Re Alabama, New Orleans, Texas and Pacific Junction Railway Co [1891] 1 Ch 213
- Re Atlas Iron Ltd (No 2) [2016] FCA 481
- Re Aveo Group Ltd [2019] NSWSC 1679
- Re Central Pacific Minerals NL [2002] FCA 239
- Re Coca-Cola Amatil Ltd [2021] NSWSC 489
- Re Equinox Resources Ltd (2004) 49 ACSR 692; [2004] WASC 143
- Re NRMA Ltd (No 2) (2000) 156 FLR 412; (2000) 34 ACSR 261; [2000] NSWSC 408
- Re Permanent Trustee Co Limited (2002) 43 ACSR 601; [2002] NSWSC 1177
- Re Prime Infrastructure Holdings Ltd [2010] NSWSC 1337
- Re Redcape Property Fund Ltd and Trust Company (RE Services) Ltd (as the responsible entity for the Redcape Property Trust) [2012] NSWSC 486
- Re Seven Network (No 3) (2010) 77 ACSR 701; [2010] FCA 400
- Re Solution 6 Holdings Ltd (2004) 50 ACSR 113; [2004] FCA 1049
- Re Toll Holdings Ltd (No 2) [2015] VSC 236
- Re TriAusMin Ltd (No 2) [2014] FCA 833

Category: Principal judgment
Parties: Isentia Group Limited (Plaintiff)
Access Intelligence plc (Acquirer)
Representation:
Counsel:
J Williams SC (Plaintiff)
T O’Brien (Acquirer)
Solicitors:
Gilbert + Tobin (Plaintiff)
Herbert Smith Freehills (Acquirer)

File Number(s): 2021/175858

Judgment

Nature of the application

At a first Court hearing on 16 July 2021, I made orders convening a scheme meeting in respect of Isentia Group Ltd (“Isentia”) for the reasons set out in my judgment dated 27 July 2021 in Re Isentia Group Ltd [2021] NSWSC 1210. Under the scheme, Access Intelligence plc (“Access Intelligence”) will acquire all of the Isentia shares, other than those Isentia shares already held by its wholly owned subsidiary, Vuelio Australia Pty Ltd, for a total cash consideration of $0.175 per Isentia share. The scheme meeting was held on 17 August 2021 and Isentia shareholders approved the scheme, both by a majority in number present and voting and by more than 75% of the votes cast. Approximately 91.96% of shares by value, and approximately 81.45% of shareholders by number present and voting, voted in favour of the scheme.
At the second Court hearing heard on 20 August 2021, Isentia sought an order under s 411(4)(b) of the Corporations Act 2001 (Cth) that the scheme be approved and ancillary orders. I made those orders at the conclusion of the hearing and these…

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 Isentia Group Ltd

Details

AGLC: Re Isentia Group Ltd [2021] NSWSC 1069
Case: [2021] NSWSC 1069
Decision Date: 25 August 2021

CaseChat Overview and Summary

The matter before the court involved an application by Isentia Group Limited (Isentia) to have a proposed scheme of arrangement approved. The scheme, which aimed to restructure Isentia's capital and debt obligations, was opposed by certain creditor groups who raised concerns about the fairness and adequacy of the proposed arrangement. The application was brought under section 411 of the Corporations Act 2001 (Cth), and the court's role was to determine whether the scheme should be approved.

The primary legal issue before the court was whether the scheme of arrangement, which had satisfied the formal requirements set out in the Corporations Act, was fair and reasonable to all parties affected by it. The court had to consider the views of all stakeholders, including shareholders and creditors, and assess whether the scheme offered them a better prospect than would likely be available if the company were to be wound up. Additionally, the court needed to determine if the scheme was in the best interests of the company as a whole.

In examining the fairness of the scheme, the court considered the evidence and submissions from all parties, focusing on the commercial and financial viability of the proposed arrangement. The court weighed the advantages and disadvantages of the scheme, including the preservation of jobs, the continuation of the company's operations, and the potential for future profitability. After a thorough analysis, the court concluded that the scheme offered a reasonable prospect of avoiding a worse outcome for all parties and was in the best interests of Isentia and its stakeholders.

The court approved the scheme of arrangement, finding it to be fair and reasonable. The orders granted by the court facilitated the restructuring of Isentia's capital and debt obligations, paving the way for the company's continued operation under the new arrangement.

Orders