Re Marengo Mining Ltd (No 2)

The case before the Federal Court of Australia involves Marengo Mining Ltd, which sought approval for a scheme of arrangement with its shareholders, pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth). This was the second hearing in relation to the scheme, with the first hearing resulting in an order for the convening of a meeting of shareholders and the approval of the explanatory statement required by s 412(1)(a) of the Corporations Act. The key legal issues the Court needed to decide were whether the scheme meeting was properly convened in accordance with the Court's earlier order, if the procedural requirements of the scheme had been satisfied, and whether the Court should exercise its discretion to approve the scheme.

The Court found that all procedural matters had been satisfied, including the registration of the explanatory statement, and the despatch of the relevant documents to shareholders, with the exception of 91 cases where notification was made using the nominated notification means allowed by s 249J of the Corporations Act. The Court accepted that the delay in notification for these 91 shareholders was not due to Marengo Mining's fault, and the order convening the meeting was varied to allow for electronic notification. Additionally, the Court found that Marengo Mining had satisfied its notice obligations to the beneficial holders under Canadian National Instrument 54-101, despite the delay by Broadbridge US in despatching the meeting documents. The Court also accepted that the special statutory majorities were met, and the scheme had been advanced in good faith and was fair and reasonable. With regard to the Court's discretion, the Court was satisfied that all relevant matters had been brought to its attention, and the scheme met the requirements of s 411 of the Corporations Act.

In light of these findings, the Court approved the scheme in the terms proposed by Marengo Mining, with the amendment mentioned in respect of the date of lodgement. The Court's decision also noted that Marengo Mining intended to rely on the Court's approval for the purposes of claiming exemption under s 3(a)(10) of the Securities Act of 1933 (US) in connection with the implementation of the proposed scheme.