Solicitors:
Ashurst Australia (Plaintiff)
Cowell Clarke (Defendant)
File Number(s): 2022/327951
[2]
Nature of the application and background
By Originating Process filed on 3 November 2022, the Plaintiff, Salar Blanco LLC ("SB") sought orders under s 411 of the Corporations Act 2001 (Cth) ("Act") at a first Court hearing to convene a meeting of its sole member ("Chilean Parent") for the purpose of considering a purported scheme of arrangement between SB and Chilean Parent, in a reconstruction that would lead to its assets and liabilities becoming assets and liabilities of the Defendant, Lithium Power International Ltd ("LPI"). At the second Court hearing, SB sought orders under s 411(4)(b) and 413 of the Act that the scheme be approved and that its assets and liabilities vest in and become liabilities of LPI. SB also there sought an order that it should then be deregistered by ASIC without being wound up.
By way of background, SB is a limited liability company incorporated under the laws of Delaware in the United States of America and a special purpose vehicle whose sole undertaking is to acquire shares in Minera Salar Blanco SA ("Asset Co"), which is incorporated in the Republic of Chile. SB is a wholly owned subsidiary of Chilean Parent which presently holds 33.3% of the shares in Asset Co. SB was registered as a foreign entity under Pt 5B.2 of the Act on 20 October 2022, although it is not apparent that it conducts any business in Australia or required any such registration. LPI, through a wholly owned subsidiary, owns 51.55% of the shares in Asset Co, which in turn holds the mining rights and tenement in respect of a mining project in Chile ("Chilean Project").
On 22 June 2022, LPI announced to Australian Securities Exchange that it had entered into agreements to consolidate ownership of the Chilean Project by two all-scrip mergers. The proposed transaction comprised, inter alia, the consolidation of LPI and SB by a merger under s 18-209 of the Delaware Limited Liability Company Act ("DLLC Act") and the proposed scheme of arrangement under Pt 5.1 of the Act then seeking orders of this Court "in support of" the Merger. LPI, SB and Chilean Parent entered into a merger agreement on 22 June 2022, and it was a condition of the merger agreement that SB propose and implement the proposed scheme.
I made the orders sought by SB at an adjourned first Court hearing on 6 December 2022 and at a second Court hearing on 15 December 2022. These are my reasons for making those orders. I have drawn in this judgment on submissions made by Mr Oakes, who appeared for SB, and by Ms Wong, with whom Ms Scott appeared for LPI.
[3]
Affidavit evidence and issues at the first Court hearing
I will first refer to the affidavit evidence lead at the first Court hearing on 3 November 2022, before identifying several issues which gave rise to difficulty with the scheme in the form that was initially proposed and the manner in which they were resolved at the adjourned first Court hearing on 6 December 2022.
By his affidavit dated 2 November 2022, Mr Murray Wheater, who is a partner in the firm of solicitors acting for SB in respect of the scheme, outlined the structure of the scheme. A copy of the then proposed scheme was exhibited to Mr Wheater's affidavit, and Mr Wheater noted that "[t]he purpose of the [s]cheme is to ensure that the [m]erger is also effective under Australian Law."
By his affidavit dated 2 November 2022, Mr Richard Crookes, who is an executive director of LPI, described the wider transaction between LPI and other entities and referred to the combined effect of the scheme and the Delaware merger. He addressed verification of information concerning LPI in the scheme booklet and the exclusivity and reimbursement provisions in the merger agreement. He also referred to a notice of extraordinary general meeting and explanatory statement issued to shareholders of LPI in respect of its role in the larger transaction.
By his affidavit dated 2 November 2022, Mr Andrew Phillips, who is a director of SB and an executive director of LPI, also described the background to the transaction and noted its intent to consolidate the ownership structure of the Chilean Project in LPI and referred to the steps involved in implementation of the scheme. He addressed the terms of the scheme consideration and exclusivity provisions contained in the scheme and addressed the interests and voting intention of Chilean Parent in respect of the scheme. He referred to LPI's statement of its current intentions, if the scheme is implemented, as set out in section 2 of the scheme booklet and consented to act as chair of the scheme meeting. He also outlined the process adopted for verification of information concerning SB in the scheme booklet.
By an affidavit dated 2 November 2022, Mr Matthew Greenberg, who is a legal practitioner admitted to practice in Delaware, addressed his legal opinion dealing with statutory requirements in respect of the Delaware merger.
By his affidavit dated 2 November 2022, Mr We-Ts'ai Lim, who is a partner in the solicitors acting for SB in the scheme, annexed a letter dated 2 November 2022 from the Australian Securities and Investments Commission ("ASIC") waiving compliance with the requirements of Pt 3 of Schedule 8 of the Corporations Regulations 2001 (Cth) in respect of the scheme, but also raising several questions as to the then proposed structure of the scheme. ASIC there accepted that it had been given at least 14 days' notice of the hearing of the application and had had a reasonable opportunity to examine the terms of the scheme and the draft explanatory statement and advised that it had not formed an intention to appear to make submissions or intervene to oppose the scheme at the first Court hearing. ASIC attended to observe submissions at the first Court hearing but did not intervene in it.
ASIC also noted in that letter that it had no objection to the dispatch of the then draft scheme booklet on the basis of the general disclosure principles set out in ASIC Regulatory Guide 60, but identified a question whether the Court should exercise jurisdiction in respect of the then proposed scheme, although it recognised that question was a matter for the Court. ASIC there noted that an Australian court had only once approved a members' scheme of arrangement involving a foreign registered company in Re Redcliffe Resources Ltd [2016] FCA 404, and expressed the view that an Australian court would not generally assume jurisdiction in respect of a matter if the Australian court was a "clearly inappropriate forum". ASIC questioned whether it was necessary or desirable, as a matter of public policy, that the Court should be asked (as matters then stood) to "confirm" the effect of the Delaware merger. That question was rightly raised in respect of the original structure of the transaction, but was displaced by amendments to the transaction made prior to the adjourned hearing on 6 December 2022, which had the result that the Australian scheme would have operative effect prior to the implementation of the Delaware merger.
ASIC also there referred to Hong Kong and English case law in respect of creditors' schemes of arrangement that doubted the need for parallel proceedings, where a scheme implemented in an appropriate jurisdiction would ordinarily be recognised in other jurisdictions, referring to Da Yu Financial Holdings Ltd [2019] HKCFI 2531; Re Rare Earth Magnesium Technology Group Holdings Ltd [2022] HKCFI 1686 and Re PGSASA [2021] EWHC 222 (Ch) at [29]. ASIC also questioned whether the rationale for a Court assuming jurisdiction in a multi-jurisdictional creditors' scheme extended to a members scheme and questioned whether, as the scheme was originally structured, there was an arrangement or a compromise, where the merger would have taken effect under Delaware law before any orders made by the Court in respect of the scheme.
SD also relied on an affidavit dated 2 November 2022 of Mr Carlos Comandari, which addressed the effect of the proposed amended scheme under Chilean law. By a second affidavit dated 3 November 2022, Mr Lim annexed further correspondence between the solicitors acting for SB and ASIC and addressed an amendment made in respect of the constitution and share capital of Chilean Parent.
The issues raised by ASIC in respect of the proposed scheme, in its original form, had substantial merit. Several difficulties arose with the application at the first Court hearing on 3 November 2022, which included questions as to whether the Court had or should exercise jurisdiction in respect of the scheme; difficulty in identifying the content of the scheme with any degree of precision; and inadequacies in the explanation of the scheme. In his submissions for the first Court hearing, prior to the amendment of the scheme, Mr Oakes rightly acknowledged that the scheme was not a common form of scheme of arrangement and recognised the matters raised by ASIC in its letter dated 2 November 2022. Mr Oakes submitted, in response, that the Court had jurisdiction to deal with the scheme and that there was an element of compromise or arrangement within the scheme. He noted the commercial intent of the scheme and surrounding transactions, including the Delaware merger, which was to bring about a transfer by Chilean Parent of its shares in Asset Co to SB; a merger under s 18-209 of the DLLC Act, pursuant to which SB would merge into LPI; and a scheme of arrangement under s 411 of the Act, supplemented by orders under s 413 of the Act, by which SB's property, liabilities and undertaking would be assumed by LPI; and a Canadian plan of which I need not further address. I did not doubt that the transaction implemented legitimate commercial objectives, although a question arose as to whether the then scheme would have any operative effect under ss 411 and 413 of the Act. Mr Oakes also outlined the "structural change" which was to be effected by the scheme, but that submission had the difficulty that that structural change was not effected by the scheme, but by the implementation of the Delaware merger prior to implementation of the proposed scheme.
Mr Oakes also submitted that SB proposed the scheme "to ensure that the assumption by [LPI] of the whole of [SB's] property, liabilities and undertakings is effective under Australian law". However, it was not then apparent how the scheme would "ensure" that consequence, absent any apparent operative effect. Mr Oakes pointed to advice given by an experienced American lawyer which recognised the effect of the Delaware merger under Delaware law, but noted a question whether the Delaware merger was "efficacious to transfer all of [SB's] property, liabilities and undertaking to [LPI] under Australian law" and suggested that a prudent solicitor should consider whether any consent or procedure was available under Australian law to minimise or eliminate any transaction risk. I do not doubt the prudence of addressing that question, but it does not follow that the Court could or should approve a scheme under s 411 of the Act, where it would have no operative effect beyond the steps already taken under the Delaware merger.
Mr Oakes recognised that the proposed scheme must involve a "compromise or arrangement" within the meaning of s 411 of the Act, referring to Alstom Signalling Solutions Pty Ltd v Alstom Transport Australia Pty Ltd [2016] FCA 852 at [18]. It was also not apparent how that compromise or arrangement would have been effected by the scheme, in its original form where all relevant steps would have occurred under the Delaware merger prior to implementation of the scheme. Mr Oakes also addressed other aspects of the scheme, but I need not address those submissions further, where the structure of the scheme had changed by the date of the adjourned first Court hearing, so that the relevant transactions would be implemented by the scheme prior to implementation of the Delaware merger.
[4]
Amendments made to the scheme and issues addressed at the adjourned first Court hearing
In the light of these difficulties, the first Court hearing was adjourned to 6 December 2022, and SB then amended aspects of the proposed scheme. The parties to the amended scheme are SB and Chilean Parent and paragraphs (f) - (i) of the "Background" to the amended scheme record that:
"(f) [SB, LPI and Chilean Parent] have entered into the Merger Agreement to facilitate the merger of [SB] with and into [LPI] in accordance with section 209 of the DLLC Act. …
(g) The effect of the implementation of the Merger Agreement is that, under Delaware law [SB] and [LPI] merge into a single surviving Corporation, which will be [LPI].
(h) The director of [SB] has proposed the Scheme to [Chilean Parent] and considers that the Scheme is in the best interests of [SB] and [Chilean Parent].
(i) If the Scheme becomes Effective and the merger is otherwise implemented in accordance with the Merger Agreement
(1) All of the Assets and Liabilities of [SB] will be transferred to and vest in [LPI];
(2) [LPI] will issue the Scheme Consideration to [Chilean Parent]; and
(3) [SB] will cease to exist as an entity."
The amended scheme defines the "Target Assets" which are the subject of the scheme as SB's Assets (as defined) including all shares in Asset Co and its choses of action under the merger agreement and defines the "Target Liabilities" as SB's obligations under the merger agreement and its constituent documents. The scheme was also amended to delete a former provision for the certificate of merger to be filed with the Secretary of State of Delaware as a condition precedent to the scheme, with the result that the scheme would be implemented before the certificate of merger was filed in Delaware and the merger became effective under Delaware law. The amended scheme also provided so that SB must, at or by the Closing (as defined), lodge a copy of the Court orders with ASIC and this will now occur before the certificate of merger is filed with the Secretary of State in Delaware.
Clause 3.1 of the amended scheme identified the "Purpose of the Scheme" as follows:
"The purpose of the Scheme is to achieve a merger of [SB] with and into [LPI] by a Court-ordered transfer all Target Assets and Target Liabilities to [LPI] followed by the deregistration of [SB] as a foreign company, in each case consistent with the effect of the Merger Agreement as a matter of Delaware law."
Clause 3.2 then recited that, on the Effective Date (as defined) and by the orders made by this Court, the Target Assets will transfer to, vest in and become assets of LPI and all Target Liabilities will transfer to and become liabilities of LPI and SB will be deregistered by ASIC as a foreign company under Pt 5B.2 Div 2 of the Act. Clause 3.3 refers to a reconstruction and arrangement between SB and Chilean Parent and cl 4.1 provides for Chilean Parent's entitlement to receive the Scheme Consideration (as defined).
The explanatory statement records that, as at the date of the explanatory statement, SB "holds a contractual right to acquire all of [Chilean Parent's] interest in Asset Co but no other Asset" and observes that:
"Prior to Implementation, [Chilean Parent] will transfer all of its interest in [Asset Co] to [SB]."
The explanatory statement then states that:
"The Scheme has been proposed for the purpose of transferring the Target Assets and Target Liabilities to LPI."
The explanatory statement was also amended to reflect the fact that the scheme is proposed to transfer the Target Assets and Target Liabilities (as defined) to LPI, rather than contemplating that the scheme has some confirming effect in relation to the Delaware merger. The scheme booklet was also amended to recognise that the scheme would become effective following SB's lodgement of orders approving the scheme with ASIC.
At the adjourned first Court hearing, SB relied on the further affidavit dated 30 November 2022 of Mr Cristobal Garcia-Huidobro Ramirez, who is the chief executive officer and managing director of LPI, which referred to a proposal made by a third party to acquire all of Asset Co's shares through an intermediary company and to the attitude of the controlling shareholder of Chilean Parent to that proposal. I need not address that proposal further, where it has little relevance to the question whether the Court should approve the scheme, where there is no suggestion that proposal has been accepted. By his affidavit dated 2 December 2022, Mr Felipe Cousino P, who is a legal practitioner in Chile, provided an opinion as to additional matters of Chilean law and expressed the opinion that an order made by the Court would be effective to transfer SB's assets to LPI under Chilean law. By a further affidavit dated 5 December 2022, Mr Joshua Walsh, a solicitor acting for SB, annexed further correspondence between ASIC and SB's solicitors. By its email dated 5 December 2022, ASIC indicated that its position as to the scheme remained as set out in its letter dated 1 November 2022, which I have addressed above. By his affidavit dated 5 December 2022, Mr Murray Wheater exhibited the amended scheme of arrangement and amended scheme booklet.
On the adjourned date of the first Court hearing, Ms Wong made the primary submissions for LPI, which plainly had a commercial interest in the implementation of the scheme as the acquirer of SB's assets and liabilities under the amended scheme, and Mr Oakes adopted those submissions. Ms Wong pointed to the scheme's role, together with the Delaware merger, in the wider proposal for a consolidation of LPI's ownership of the Chilean Project. Ms Wong referred to the content of the concepts of "reconstruction" and "amalgamation" as considered in Re South African Supply and Cold Storage Co [1904] 2 Ch 268; ICM Australia Pty Ltd v Stork Food Systems Australasia Pty Ltd (2006) 25 ACLC 208; [2006] FCA 1849 and Woolworths Group Limited v Pinnacle Liquor Group Pty Ltd, Re Woolworths Group Ltd [2019] FCA 1810 at [20]. She submitted, and I accept, that SB is a Pt 5.1 body for the purposes of s 411 of the Act, where it is a registrable body that is registered under Pt 5B.2 of the Act. She submitted, and I also accept, that the amended scheme involves an element of compromise or arrangement, where Chilean Parent receives shares in LPI in consideration for giving up its rights in Asset Co, in connection with an amalgamation by which SB's undertakings are transferred to LPI. She submits, and I accept, in respect of the amended scheme that:
"The Court should be satisfied that the Scheme is an 'arrangement' which involves the necessary element of compromise in effecting an amalgamation [SB] and [LPI] in which substantially all of the assets and liabilities of [SB] (including the equity interest in the Asset Co shares) will be transferred to [LPI] with the result that the jurisdictional requirement for a section 413 reconstruction or amalgamation is enlivened."
She also emphasised, and I accept, that the amendments made to the implementation of the arrangements, after the first Court hearing, have the result that the scheme will now become effective prior to the Delaware merger taking effect, and now has legal and operative effect.
Ms Wong also addressed the question whether there is utility in the Court exercising jurisdiction in the proceedings, although it seems to me that question is largely answered by the recognition that the restructured scheme now has legal and operative effect and that LPI has a legitimate interest in obtaining the benefit of the restructuring under Australian law. Ms Wong also points to the evidence of Mr Cousino, to which I referred above, that an Australian Court judgment providing for the merger or amalgamation of an entity owing shares in a Chilean company with another entity will confer a valid title that gives rise to the right to transfer of ownership under Chilean law, which will in turn allow for satisfaction of a second requirement for a transfer of an asset under Chilean law, namely a mode of acquisition, which can be satisfied by other steps taken under Chilean law. Ms Wong submitted, and I accept, that the Court can be satisfied that the orders made by this Court transferring the assets of SB will also have utility, because they will enable a binding and valid transfer of shares in Asset Co to occur under Chilean law by that means.
Ms Wong also refers to the observations of Emmett J in AGL Energy Services (Queensland) Pty Ltd v AGL Energy Services Pty Ltd (No 1) [2010] FCA 452 at [14]-[15] as follows:
"A scheme for reconstruction or amalgamation within s 413 is not, of itself, a compromise or arrangement between a Pt 5.1 body and its creditors within s 411. However, before the jurisdiction under s 413 can be exercised, there must be such a compromise or arrangement. As a practical matter, it may be that the compromise or arrangement is one that does not need to rely on s 411(4), because it is something that could be effected privately between a company and its members, as in this case, between the Company and the Company Member. However, there is nothing untoward, in invoking the powers conferred on the court by s 411 as a prerequisite to enlivening the further provisions of s 413 (see, for example, Re Clydesdale Bank Ltd (1950) SC 30 at 36 ff, where a clear distinction was drawn between a compromise or arrangement and a scheme of reconstruction or amalgamation under s 206 and s 208 of the Companies Act 1948 (United Kingdom), which correspond with ss 411 and 413 of the Act).
The element of compromise or arrangement that is necessary to satisfy s 411 need not be of any great magnitude or significance, so long as what is proposed can fairly be characterised as a compromise or arrangement between a company, on the one hand, and its members, on the other. That will suffice to enliven the court's powers under s 413, so long as the compromise or arrangement is proposed for the purposes of, or in connection with, a scheme for the reconstruction or amalgamation."
Ms Wong in turn submitted that the relevant parties to the amalgamation were SB and LPI and that SB has submitted to the Court's jurisdiction by agreeing to take all steps necessary to propose and implement the scheme under the terms of the merger agreement. As I noted above, SB is also now a registered foreign company under Pt 5B.2 Div 2 of the Act. Ms Wong pointed out that LPI has also submitted to the Court's jurisdiction by entering into the merger agreement, but it is in any event an Australian public company limited by shares as to which the Court would have jurisdiction. Ms Wong also pointed out that the effect of the Court's orders will give rise to LPI's obligation to transfer the merger consideration, being shares in LPI, under the relevant arrangements.
Ms Wong submitted that English authorities concerning the exercise of jurisdiction over foreign companies in respect of members and creditors schemes are of limited assistance in this case. I accept that submission, first, because it appears that the English legislation relating to reconstruction and amalgamation does not extend to foreign companies: Re Drax Holdings [2004] 1 WLR 1049 at [29]. I also accept Ms Wong's submission that the case law in respect of creditors schemes is of limited assistance, where the question which then arises will often turn upon the governing law of relevant contractual obligations. It is not necessary to address Ms Wong's further submissions as to the circumstances in which English Court's have been prepared to accept jurisdiction in respect of creditors' schemes, often involving a party or parties that are incorporated in other jurisdictions. I therefore accept Ms Wong's submission that the Court has a proper basis to exercise jurisdiction where the amended scheme where will now have operative effect prior to the implementation of the Delaware merger; an order made by this Court in respect of the scheme will be recognised in Chile in respect of the shares in Asset Co; and that order will bind LPI which will acquire the relevant assets and liabilities under s 413 of the Act.
In summary, the amendments to the scheme addressed the difficulty that the substantive steps in the transaction would then have taken effect under the Delaware merger prior to the implementation of the scheme, so that the amended scheme will now take effect between the parties to it under Australian law prior to the implementation of the Delaware merger. So far as ASIC had raised a question as to whether the Court should exercise jurisdiction in respect of the scheme, it seems to me that the fact that SB (which, as I noted above, is a Delaware limited liability company) has been registered in Australia as a foreign company under Pt 5B.2 Div 2 of the Act allows a proper basis for jurisdiction, where the Act extends the scheme provisions to registered foreign companies; and, as recognised in the English case law, the fact that orders made by the Court will also be recognised by the Chilean courts is a matter that supports the exercise of jurisdiction. I also bear in mind that the wider transaction involves the transfer of assets and liabilities to LPI, an Australian listed company, and the issue of its shares. For these reasons, I made the orders sought by SB to convene the scheme meeting at the adjourned first Court hearing on 6 December 2022.
[5]
Affidavit evidence and issues raised at the second Court hearing
The restructured scheme was subsequently approved at a meeting attended by SB's sole shareholder, Chilean Parent. At the second Court hearing, SB then sought orders under ss 411(4)(b) and 413 of the Act that the scheme be approved and that its assets and liabilities vest in and become liabilities of LPI. SB also there sought an order that, although it had only recently become registered as a foreign company under the Act, presumably in order to invoke the Court's jurisdiction in respect of the scheme, it should then be deregistered by ASIC without being wound up.
At the second Court hearing, SB read the second affidavit dated 14 December 2022 of Mr Phillips, which referred to his attendance at the scheme meeting of SB held on 13 December 2022, which was then adjourned to 14 December 2022 after Chilean Parent had not attended by proxy or otherwise, and to the adjourned meeting held on 14 December 2022 which was attended by Chilean Parent by proxy. Chilean Parent voted its shares in favour of the scheme at that meeting and the requisite statutory percentages for approval of the scheme were satisfied. By his affidavit dated 14 December 2022, Mr Joshua Walsh, who is a solicitor in the firm acting in the matter, gave evidence of lodgement of the scheme booklet with ASIC and the dispatch of the scheme booklet to Chilean Parent and exhibited a letter dated 8 December 2022 from ASIC confirming that it had no objection to the scheme for the purposes of s 411(17)(b) of the Act. SB also tendered a conditions precedent certificate dated 15 December 2022 (Ex A1).
I am satisfied that the relevant statutory and procedural requirements in respect of the scheme had been met prior to the second Court hearing. The Court must then exercise a judicial discretion whether to approve the scheme under 411(4)(b) of the Act at the second Court hearing: Re Tabcorp Holdings Ltd (No 2) [2022] NSWSC 725 ("Tabcorp") at [3]; Re ResApp Health Ltd [2022] NSWSC 1353 ("ResApp Health") at [23]. I am satisfied that the scheme is fair and reasonable such that an intelligent and honest shareholder properly informed and acting alone might approve it; and, although the Court is not bound to approve a scheme simply because it has previously made orders for the convening of a scheme meeting and the statutory majorities have been achieved, the Court will recognise that shareholders (here, Chilean Parent) are generally the best judges of whether an arrangement is to their commercial advantage, and accordingly, absent good reason, will give effect to their intentions as manifested in the voting at the scheme meeting: Tabcorp at [3]; ResApp Health at [23]. I am also satisfied that the scheme was approved by the requisite majorities and there is no reason to doubt that Chilean Parent was acting in good faith and for proper purposes in exercising its vote at the scheme meeting. No other reason has arisen not to approve the scheme at the second Court hearing and ASIC has provided a statement that satisfies the requirements of s 411(17)(b) of the Act.
As I noted above, SB also sought orders for the transfer of its assets and liabilities to LPI under s 413 of the Act. That section allows the Court to make orders to facilitate the reconstruction or amalgamation of a company if three requirements are satisfied, namely that an application has been made under Pt 5.1 of the Act for the approval of a compromise or arrangement; the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for, relevantly, the amalgamation of two or more Pt 5.1 bodies; and the whole or any part of the undertaking or property of a body concerned in the scheme is to be transferred to a company under the scheme: Re Application of AGL Sydney Ltd (1994) 13 ACSR 597; Barrick (Australia Pacific Exploration) Pty Ltd v Barrick (PD) Australia Pty Ltd [2017] FCA 998 at [81]; Re Ovato Print Pty Ltd [2020] NSWSC 1882 ("Re Ovato Print") at [47]. I summarised the scope of the Court's jurisdiction under that section in Re Ovato Print Pty Ltd [2020] NSWSC 1882 at [47] as follows:
"Section 413 of the Act allows the Court to make orders for the reconstruction of a company or amalgamation of two or more companies if: (1) there is a compromise or arrangement, as is the case here in respect of the Member's Schemes; (2) which has been proposed for the purposes of, or in connection with, a scheme for, relevantly, the reconstruction of a Pt 5.1 body or bodies; and (3) the whole or any part of the undertaking or property of a body concerned in the scheme is to be transferred to a company under the scheme: Re Application of AGL Sydney Ltd (1994) 13 ACSR 597; Royal Victorian Institute for the Blind Ltd v RBS.RVIB.VAF Ltd (2004) 206 ALR 581; 22 ACLC 897; [2004] FCA 735; Barrick (Australia Pacific Exploration) Pty Ltd v Barrick (PD) Australia Pty Ltd [2017] FCA 998 at [81]. A reconstruction occurs where an undertaking is transferred to persons who are not outsiders so that substantially the same business is carried on by substantially the same persons who previously conducted it: Re Opes Prime Stockbroking Ltd (2009) 179 FCR 20; (2009) 73 ACSR 385; [2009] FCA 813 at [74] . The interests of creditors of the transferor company are relevant to whether to grant approval under this section, and the effect of the transaction on creditors and third parties will often be the most significant issue in the application: Re Opes Prime Stockbroking Ltd above."
I am satisfied that SB has here satisfied these three requirements for the making of orders under s 413 of the Act. For these reasons, I made the orders sought by SB at the second Court hearing on 15 December 2022.
[6]
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Decision last updated: 23 December 2022