Re Legend Corporation Limited

The case of Re Legend Corporation Limited involved the company seeking approval from the Court to convene a meeting of its members to consider a proposed scheme of arrangement. The scheme involved the transfer of all shares in Legend to BidCo in return for cash consideration. The primary legal issue before the Court was whether the scheme was fit for consideration by the members and whether the members were properly informed about the nature of the scheme. The Court also needed to determine if there were any elements of unfairness in the terms of the scheme that would preclude the approval of the scheme if it came before the Court for a second hearing.

The Court found that the scheme was straightforward and involved the transfer of all shares in Legend to BidCo in return for cash consideration. The Explanatory Booklet provided to members contained a recommendation from all directors that shareholders vote in favour of the scheme, a statement that all directors intended to vote in favour of the scheme, and an independent expert report that the scheme was fair and reasonable and in the best interests of Legend shareholders. The Court also scrutinised the terms of the scheme to satisfy itself that there was no element of unfairness that would be likely to preclude the approval of the scheme if it came before the Court at a second hearing for approval. The Court found that none of the particular features of the scheme raised any concerns and that the scheme was fit for consideration by the members.

The Court concluded that the scheme was of such a nature and cast in such terms that, if it achieved the statutory majorities at the scheme meeting, the Court would be likely to approve it. The Court also found that the members were properly informed as to the nature of the scheme. Therefore, the Court made the orders sought by Legend to convene the scheme meeting.

The Court's decision provides guidance to companies seeking to convene scheme meetings and the considerations that the Court will take into account in determining whether to approve such meetings. The Court's scrutiny of the terms of the scheme and its finding that the scheme was fit for consideration by the members provides reassurance to companies that the Court will not lightly refuse to convene scheme meetings where the scheme is properly presented and the members are properly informed.