Re IXLA Ltd

The case involved IXLA Ltd, which was seeking to implement a scheme of arrangement under the Corporations Act 2001 (Cth). The primary issue was whether the company could crystallise a capital loss by convening separate class meetings for different classes of shareholders. The matter was heard in the Federal Court of Australia.

The central legal issue was whether the court could approve a scheme of arrangement that involved crystallising a capital loss without convening a single general meeting, as required by section 411(1) of the Corporations Act. The specific question was whether separate class meetings could be held to approve the scheme, or if a single general meeting was mandatory.

The court held that section 411(1) of the Corporations Act requires a single general meeting for the approval of a scheme of arrangement, regardless of the number of classes of shareholders. The court determined that separate class meetings could not be convened as a substitute for a single general meeting. The court's decision emphasised the importance of the statutory requirement for a general meeting and the need for clarity in the approval process for schemes of arrangement. The scheme of arrangement was therefore not approved by the court.

The Federal Court ordered that IXLA Ltd was not permitted to proceed with the scheme of arrangement as proposed, and the scheme was dismissed. The court's decision underscored the necessity of adhering to the statutory provisions regarding shareholder meetings in the context of corporate restructuring.