Macquarie Private Capital A Limited [2008] NSWSC 323
HEARING DATE(S):
08/04/08, 09/04/08
JUDGMENT DATE :
9 April 2008
JURISDICTION:
Equity Division Corporations List
JUDGMENT OF:
Barrett J
EX TEMPORE JUDGMENT DATE:
9 April 2008
DECISION:
Orders made for convening of meetings
CATCHWORDS:
CORPORATIONS - compromises and arrangement - proposal for interlinked schemes of arrangement and amendment of managed investment scheme constitution so that "stapled securities" acquired by outside party for cash - applications for orders under Corporations Act, s 411(1) and for judicial advice under Trustee Act 1925, s 63 - whether potential voting restriction affecting one security holder should be addressed at this stage - where consideration variable but formula fixed and quantum will be ascertained and notified before meetings - where security holders will be subjected to warranty that securities free from encumbrance - whether one holder constitutes separate class for scheme purposes - "no shop", "no talk" and "break fee" provisions - whether court should at convening stage consider avoidance question posed by s 411(17)(a) - meaning of that provision discussed - need for explanatory statement to set out scheme conditions precedent in full
Macquarie Private Capital A Limited - First Plaintiff Macquarie Private Capital B Limited - Second Plaintiff Macquarie Private Capital Management Limited - Third Plaintiff
FILE NUMBER(S):
SC 2201/08
COUNSEL:
Mr M B Oakes SC - Plaintiffs Mr F Gleeson SC - BSPEL Australia Ltd and Bear Stearns Private Equity Ltd by leave
SOLICITORS:
Minter Ellison - Plaintiffs Jones Day - BSPEL Australia Ltd and Bear Stearns Private Equity Ltd by leave
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST
BARRETT J
WEDNESDAY 9 APRIL 2008
2201/08 MACQUARIE PRIVATE A LIMITED AND 2 ORS
JUDGMENT
1 In these proceedings, each of the three plaintiff companies (which I shall call “MCPA”, “MCPB” and “MPCM”) seeks separate relief in relation to a composite proposal involving all of them.
2 Each of MCPA and MCPB applies for orders under s 411(1) of the Corporations Act 2001 (Cth) for the convening of a meeting of its members to consider a…
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.
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AGLC
Re Macquarie Private Capital A Ltd [2008] NSWSC 323
Case
[2008] NSWSC 323
Decision Date
CaseChat Overview and Summary
Macquarie Private Capital A Limited applied to the court for orders to approve a proposal for interlinked schemes of arrangement and an amendment of the managed investment scheme constitution. The proposal involved the acquisition of "stapled securities" by an outside party for cash. The court was required to determine whether a potential voting restriction affecting one security holder should be addressed at this stage of the proceedings, where the consideration was variable but the formula was fixed and the quantum would be ascertained and notified before meetings. The court also needed to decide whether one security holder constituted a separate class for scheme purposes and whether it should consider the avoidance question posed by section 411(17)(a) of the Corporations Act at the convening stage. Additionally, the court examined the "no shop", "no talk" and "break fee" provisions and the need for an explanatory statement to set out the scheme conditions precedent in full.
The court held that the potential voting restriction affecting one security holder should be addressed at the convening stage as it was relevant to the fairness of the scheme. The court also determined that one security holder did not constitute a separate class for scheme purposes and that it was not necessary to consider the avoidance question posed by section 411(17)(a) at the convening stage. The court found that the "no shop", "no talk" and "break fee" provisions were reasonable and that the explanatory statement was sufficient to set out the scheme conditions precedent in full. The court granted the orders sought by Macquarie Private Capital A Limited.
The court ordered that the interlinked schemes of arrangement and the amendment of the managed investment scheme constitution be approved, subject to certain conditions. The court also ordered that the security holders be subjected to a warranty that the securities were free from encumbrance and that the quantum of consideration would be ascertained and notified before meetings. The court further ordered that the explanatory statement be delivered to the security holders in accordance with the provisions of the Corporations Act.