Re People Telecom Limited

Case [2009] FCA 180


FEDERAL COURT OF AUSTRALIA

People Telecom Limited, in the matter of People Telecom Limited [2009] FCA 180

CORPORATIONS – application to convene scheme meeting and approve explanatory statement – maximum break fee payable in excess of Takeover Panel’s one percent guideline – break fee not excessive in the circumstances – provision in proxy deeds for shareholders who have committed themselves in favour of voting for transaction – application approved

Corporations Act 2001 (Cth) – ss 411(1), 1319
Corporations Regulations 2001 (Cth)
Federal Court (Corporations) Rules 2000 – rules 2.15, 3.4(3)(b)

Re APN News & Media Ltd (2007) 62 ACSR 400 referred to
Re SFE Corporation Limited [2006] FCA 670 referred to

PEOPLE TELECOM LIMITED (ACN 009 273 152)

NSD 138 of 2009

JACOBSON J
25 FEBRUARY 2009
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 138 of 2009

BETWEEN:

PEOPLE TELECOM LIMITED (ACN 009 273 152)
Plaintiff

JUDGE:

JACOBSON J

DATE OF ORDER:

25 FEBRUARY 2009

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), that the Plaintiff convene a meeting (Shareholders’ Meeting) of its members holding ordinary shares, other than the holders of Excluded Shares in respect of those Excluded Shares (Shareholders), for the purpose of considering, and if thought fit, approving (with or without modification), a scheme of arrangement proposed to be made between the Plaintiff and its Shareholders (Scheme), being substantially in the form of Exhibit B in the proceeding.

2.In Order 1, Excluded Shares has the meaning in the Scheme.

3.Pursuant to section 411(1) of the Corporations Act, that the Scheme Booklet be approved for distribution to Shareholders.

4.The Shareholders’ Meeting take place at the offices of the Plaintiff at the People Telecom Centre, 76 Berry St, North Sydney, New South Wales at 10am on 6 April 2009.

5.Barry John Hamilton, or failing him Stephe Wilks, be appointed and act as Chairman of the Shareholders’ Meeting.

6.The Chairman of the Shareholders’ Meeting have the power to adjourn the Shareholders’ Meeting in his absolute discretion.

7.All voting at the Shareholders’ Meeting be by poll as declared by the Chairman.

8.The Plaintiff place a notice of the hearing of the application to approve the Scheme in The Australian newspaper on or before 7 April 2009, such notice to be substantially in the form of Form 6 of the Federal Court (Corporations) Rules 2000.

9.The Plaintiff be given leave to truncate the notice period required by Rule 3.4 (3)(b) of the Federal Court (Corporations Rules) 2000.

10.The proceeding be stood over to 9 April 2009 at 9.30 am before Justice Jacobson for the hearing of any application to approve the Scheme.

11.Pursuant to section 1319 of the Corporations Act, and Rule 2.15 of the Federal Court (Corporations) Rules 2000, the Plaintiff be exempted from compliance with the requirements of Regulations 5.6.12 to 5.6.36A of the Corporations Regulations 2001, save that Regulation 5.6.13…

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AGLC
Re People Telecom Limited [2009] FCA 180
Case
[2009] FCA 180
Decision Date

CaseChat Overview and Summary

In the Federal Court, the plaintiff People Telecom Limited sought a series of orders to facilitate the approval of a scheme of arrangement between the company and its shareholders. The primary focus was to convene a shareholders' meeting for the consideration and potential approval of the proposed scheme. The case addressed the legalities surrounding the implementation of the scheme, including the distribution of the scheme booklet and the procedural aspects of the shareholders' meeting.

The court had to determine whether the proposed scheme of arrangement was in the best interests of the shareholders and whether the procedural steps outlined in the application were compliant with the Corporations Act 2001 and the relevant federal court rules. Additionally, the court examined the necessity of certain exemptions from specific regulatory requirements under the Corporations Regulations 2001 and the appropriateness of the notice period for the shareholders' meeting.

The court found that the scheme was beneficial to the shareholders and that the procedural steps outlined by the plaintiff were appropriate. The judge approved the convening of the shareholders' meeting and the distribution of the scheme booklet, noting that the proposed exemptions from regulatory requirements were justified. The judge also determined that the notice period could be truncated and set the hearing date for any objections to the scheme. Ultimately, the court granted all the orders sought by the plaintiff, allowing the process to proceed as planned.

The orders granted included convening the shareholders' meeting at a specified location and time, appointing the chairman, and setting out the voting procedures. The court also approved the notice of the hearing to be published in a newspaper and granted exemptions from certain regulatory requirements. This decision allowed People Telecom Limited to move forward with the proposed scheme of arrangement, subject to any objections raised by shareholders.

Orders

Orders of the court

1. Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), that the Plaintiff convene a meeting (Shareholders’ Meeting) of its members holding ordinary shares, other than the holders of Excluded Shares in respect of those Excluded Shares (Shareholders), for the purpose of considering, and if thought fit, approving (with or without modification), a scheme of arrangement proposed to be made between the Plaintiff and its Shareholders (Scheme), being substantially in the form of Exhibit B in the proceeding.

2. In Order 1, Excluded Shares has the meaning in the Scheme.

3. Pursuant to section 411(1) of the Corporations Act, that the Scheme Booklet be approved for distribution to Shareholders.

4. The Shareholders’ Meeting take place at the offices of the Plaintiff at the People Telecom Centre, 76 Berry St, North Sydney, New South Wales at 10am on 6 April 2009.

5. Barry John Hamilton, or failing him Stephe Wilks, be appointed and act as Chairman of the Shareholders’ Meeting.

6. The Chairman of the Shareholders’ Meeting have the power to adjourn the Shareholders’ Meeting in his absolute discretion.

7. All voting at the Shareholders’ Meeting be by poll as declared by the Chairman.

8. The Plaintiff place a notice of the hearing of the application to approve the Scheme in The Australian newspaper on or before 7 April 2009, such notice to be substantially in the form of Form 6 of the Federal Court (Corporations) Rules 2000.

9. The Plaintiff be given leave to truncate the notice period required by Rule 3.4 (3)(b) of the Federal Court (Corporations Rules) 2000.

10. The proceeding be stood over to 9 April 2009 at 9.30 am before Justice Jacobson for the hearing of any application to approve the Scheme.

11. Pursuant to section 1319 of the Corporations Act, and Rule 2.15 of the Federal Court (Corporations) Rules 2000, the Plaintiff be exempted from compliance with the requirements of Regulations 5.6.12 to 5.6.36A of the Corporations Regulations 2001, save that Regulation 5.6.13 shall apply.

12. There be liberty to apply.

Note:

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

JACOBSON J

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Ratio Decidendi

Legal Principle Established

Established by: JACOBSON J

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