In the matter of Commercial Credit Holdings Limited [2026] NSWSC 910 | Case summary | Zoe

NSWNSWSC

In the matter of Commercial Credit Holdings Limited

[2026] NSWSC 910

Supreme Court of NSW|2026-07-30|Before: Black J

View on NSW Caselaw

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2026-07-30

Before

Black J

Catchwords

CORPORATIONS – arrangements and reconstructions – schemes of arrangement or compromise – application under s 411 of the Corporations Act 2001 (Cth) for orders convening meeting of members to consider and, if thought fit, to agree to proposed scheme of arrangement – whether requirements to order scheme meeting are satisfied

Source

Original judgment source is linked above.

Catchwords

CORPORATIONS – arrangements and reconstructions – schemes of arrangement or compromise – application under s 411 of the Corporations Act 2001 (Cth) for orders convening meeting of members to consider and, if thought fit, to agree to proposed scheme of arrangement – whether requirements to order scheme meeting are satisfied

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: In the matter of Commercial Credit Holdings Limited [2026] NSWSC 910

Hearing dates: 14 July 2026

Date of orders: 14 July 2026

Decision date: 30 July 2026

Jurisdiction: Equity - Corporations List

Before: Black J

Decision: Order convening scheme meeting and associated orders made.

Catchwords: CORPORATIONS – arrangements and reconstructions – schemes of arrangement or compromise – application under s 411 of the Corporations Act 2001 (Cth) for orders convening meeting of members to consider and, if thought fit, to agree to proposed scheme of arrangement – whether requirements to order scheme meeting are satisfied

- ASIC Corporations (Stub Equity in Control Transactions) Instrument 2020/734 - Corporations Act 2001 (Cth), s 9, Ch 2L, ss 411, 1319 - Supreme Court (Corporations) Rules 1999 (NSW)

By Originating Process filed on 26 June 2026, the Plaintiff, Commercial Credit Holdings Ltd (“CreditorWatch”) seeks an order under s 411 of the Corporations Act 2001 (Cth) (“Act”) in respect of a proposed scheme of arrangement with its shareholders and associated orders.
By way of background, CreditorWatch is an unlisted public company that operates as a commercial credit reporting bureau. On 12 May 2026, CreditorWatch entered a Scheme Implementation Deed (“SID”) with Currawong HoldCo Ltd (“TopCo”), an unlisted Australian public company, and Currawong BidCo Pty Ltd (“BidCo”) which provides for BidCo to acquire all of the issued shares in CreditorWatch by way of a scheme of arrangement. BidCo and TopCo (together, the BidCo Group) were each incorporated for the purpose of the scheme and are indirectly controlled by certain funds managed or advised by Warburg Pincus LLC and its affiliates (“Warburg Pincus”), a global private equity firm with over US$105 billion in assets under management.
If the scheme is approved and implemented, BidCo will acquire all of the ordinary shares and management shares on issue in CreditorWatch held by scheme shareholders for alternative consideration, comprising either cash consideration of $149.09 per CreditorWatch share, or alternatively mixed scrip and cash consideration, including TopCo Class B Shares that would be issued to CreditorWatch shareholders who make a valid election to receive the mixed consideration under the scheme. Based on the number of CreditorWatch shares on issue as at the Last Practicable Date (as defined) (being 5,076,338 CreditorWatch shares), and assuming that the Minimum Rollover Condition (as defined) is satisfied, the maximum aggregate amount of cash consideration that BidCo may be required to pay to scheme shareholders under the scheme is approximately $503,275,247, on the basis that several CreditorWatch executives make valid elections to receive the mixed consideration in respect of all CreditorWatch shares held or controlled by them, as required under the Minimum Rollover Condition, and that no other scheme shareholders make valid elections for the mixed consideration. The amount of cash consideration payable by BidCo would be reduced if other shareholders also elect to receive the mixed consideration.
I made the orders sought by CreditorWatch at the conclusion of the hearing on 14 July 2026. These are my reasons for doing so. I have drawn on the helpful submissions of Mr Giles who appears for CreditorWatch in this judgment.

CreditorWatch reads the affidavit dated 26 June 2026 of its solicitor, Mr Dilip Ramaswamy, which annexes formal documents in respect of the scheme.
CreditorWatch also reads the affidavit dated 13 July 2026 of Ms Christina Seppelt, the General Counsel and Company Secretary of CreditorWatch, who addresses the background to the proposed scheme and its terms, including the consideration payable under the proposed scheme and the conditions precedent to its implementation. Ms Seppelt also refers to the preparation of the scheme booklet; the verification process which had been adopted in respect of the scheme booklet, which was in common form; and lodgement of the scheme booklet and associated documents with the Australian Securities and Investments Commission (“ASIC”). Ms Seppelt also addresses a break fee under the proposed scheme, the proposed despatch of the scheme booklet, the manner in which the scheme meeting would be held, and the consent of both the chair and alternate chair of the scheme meeting.
Ms Seppelt notes that the board of CreditorWatch unanimously recommended that scheme shareholders vote in favour of the scheme, subject to the independent expert continuing to conclude that the scheme was in the best interests of scheme shareholders, and subject to there being no Superior Proposal (as defined) and to a regulator or Government agency not requiring the directors to withdraw or modify that recommendation or their voting intentions. Ms Seppelt also sets out the interests of CreditorWatch’s directors in shares in CreditorWatch; the position in respect of transaction bonuses that would be payable to executives of CreditorWatch in respect of the scheme; and the proposed appointment of certain CreditorWatch directors to the TopCo board if the scheme is implemented. Ms Seppelt also addresses the position as to management shares; long term incentive plans and loans made in connection with those plans if the scheme is implemented; and the position as to deeds of indemnity, insurance and access in respect of CreditorWatch and its directors and officers. She also refers to proposed communications with scheme shareholders prior to the scheme meeting.
By his affidavit dated 10 July 2026, Mr Jonathan Brennan, who is a Vice President of Warburg Pincus and a director of BidCo and TopCo, also addresses the entry into the SID. Mr Brennan also notes that, following implementation of the proposed scheme, between 60% and 69% of the shares in TopCo would be owned and controlled by shareholders comprising funds that are managed by Warburg Pincus and which may include co-investors which invest beside the Warburg Pincus Funds. Mr Brennan also addresses the execution of a Deed Poll dated 9 July 2026 by BidCo and TopCo and the manner in which the scheme consideration would be funded, and outlined shareholders’ deed and nominee arrangements in respect of TopCo. Mr Brennan also describes the process which had been undertaken to verify information relating to the BidCo and TopCo contained in the scheme booklet, which again was in common form.
CreditorWatch also tenders a letter dated 13 July 2026 from ASIC which confirmed that ASIC had had a reasonable opportunity to examine the terms of the scheme and associated documents and did not propose to make submissions or intervene to oppose the scheme at the first Court hearing, and reserved its position in respect of s 411(17) of the Act to the second Court hearing.

Mr Giles addresses the well-established principles as to the Court’s role at the first Court hearing in respect of a scheme in submissions. The Court will determine, in the exercise of its discretion, whether to approve the convening of a scheme meeting and the explanatory statement if it is satisfied of several matters, namely that the plaintiff is a Pt 5.1 body; the proposed scheme is an “arrangement” within the meaning of s 411 of the Act; the scheme is bona fide and properly proposed; ASIC has had a reasonable opportunity to examine the proposed scheme and explanatory statement, to make submissions and has had 14 days’ notice of the proposed hearing date of the first Court hearing; the procedural requirements under the Supreme Court (Corporations) Rules 1999 (NSW) (“Rules”) have been met; and there is no apparent reason why the scheme should not, in due course, receive the Court’s approval if the necessary majority of votes is achieved: Re Orion Telecommunications Ltd [2007] FCA 1389 at [5]; Re Staging Connections Group Ltd [2015] FCA 1012 at [19]; Re Wridgways Australia Ltd [2010] FCA 1187 at [30]; Re Ellerston Global Investments Ltd [2020] NSWSC 879 at [25]; Re Vocus Group Ltd [2021] NSWSC 630 at [12].
The Court will not ordinarily summon a scheme meeting unless the scheme is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the Court would be likely to approve it. The Court will consider whether the proposed scheme is fit for consideration at the proposed scheme meeting, in the sense that it is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the Court would be likely to approve it on the hearing of a petition which is unopposed; and members are to be properly informed as to the nature of the scheme before the scheme meeting: FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72, approved in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 504; [1993] HCA 15; Re Foundation Healthcare Ltd (2002) 42 ACSR 252; [2002] FCA 742 at [36] and [44], cited with apparent approval in Re CSR Ltd (2010) 183 FCR 358; [2010] FCAFC 34 at [58]; Re InvoCare Ltd [2023] NSWSC 1180 at [16]–[17]; Re Absolute Equity Performance Fund Ltd [2022] FCA 933 at [18]–[22].
I am satisfied that each of the preconditions to the exercise of the Court’s discretion in s 411 of the Act is satisfied in this case. CreditorWatch is a company registered under the Act and a Pt 5.1 body. The proposed scheme is an “arrangement” within the scope of s 411 of the Act where it involves the acquisition of the shares in CreditorWatch in return for consideration being paid to its shareholders. There is no reason to think that the scheme is not bona fide or properly proposed.
The directors of CreditorWatch have formed the view that the scheme is in the best interests of its shareholders and they have unanimously recommended that shareholders vote in favour of the scheme in the absence of a Superior Proposal and subject to the independent expert concluding (and continuing to conclude) that the scheme is in shareholders’ best interests. An independent expert, Deloitte Corporate Finance Pty Ltd, has assessed the underlying value of CreditorWatch shares as between $118.80 to $135.05 per CreditorWatch share, and the proposed cash consideration of $149.09 per scheme share is above that valuation range, and also expresses the view that the value of the proposed mixed consideration is within that valuation range.
ASIC has here had a reasonable opportunity to examine the proposed scheme and scheme booklet, to make submissions and has had the necessary notice of this hearing and, as I noted above, has indicated that it does not currently propose to appear to make submissions or intervene to oppose the scheme at this hearing. The procedural requirements under the Rules have been met, where I will vary the requirements of r 3.4 of the Rules to permit publication of notice of the second Court hearing on CreditorWatch’s website.

Mr Giles also draws several other matters to the Court’s attention. First, the scheme booklet discloses the material interests of the CreditorWatch directors in respect of the proposed transaction. Several CreditorWatch directors hold CreditorWatch shares and expect to receive an offer of shares in a management incentive scheme established by TopCo following implementation of the scheme. Mr Giles also notes that CreditorWatch and BidCo have agreed that, if the scheme is implemented, and subject to obtaining any necessary shareholder approvals, Mr Coghlan, the Chief Executive Officer of CreditorWatch, will receive a one-off cash transaction retention bonus of $800,000, paid after the implementation of the scheme. Each CreditorWatch director considers that despite the interests they have in the transaction, or benefits which may be received by them if the scheme is implemented, it is appropriate for him or her to make a recommendation on the scheme, given their respective roles in the operation, management and oversight of CreditorWatch, and their experience and industry knowledge. Mr Giles submits, and I accept, that these interests do not make it inappropriate for the directors to make a recommendation, where they are sufficiently disclosed in the scheme booklet: Re Intega Group Ltd [2021] NSWSC 1434 at [22]; Re Coca-Cola Amatil Ltd [2021] NSWSC 270 at [15]–[16]; Re Link Administration Holdings Ltd [2022] NSWSC 650 at [21]; Re Infomedia Ltd [2025] NSWSC 1230 at [19].
Second, Mr Giles addresses the question of performance risk. He points out that the scheme adopts the conventional step of making the transfer of all scheme shares to BidCo subject to the provision of the scheme consideration, so that no transfer of scheme shares can occur unless and until the cash consideration to which scheme shareholders are entitled to has been deposited into a trust account for the benefit of those shareholders. Mr Giles notes that TopCo intends to fund the cash consideration payable to CreditorWatch shareholders, to which I referred above, by equity funding and that BidCo and CreditorWatch have the benefit of a legally binding Equity Commitment Letter dated 12 May 2026 from the Warburg Pincus Funds, by which those funds severally commit to invest (or procure the investment of) in BidCo an amount sufficient to fund the maximum cash consideration. By the Deed Poll entered into by BidCo and TopCo in favour of scheme shareholders, they undertake to provide or procure the provision of the scheme consideration to each scheme shareholder in accordance with the terms of the scheme, and to undertake or procure the undertaking of all other actions, and give each acknowledgement, representation and warranty (if any) attributed to either BidCo or TopCo under the scheme. The Court will give particular attention to the availability of funding where, as here, the bidder in a scheme is a special purpose vehicle which does not have capacity to perform its obligations without financial support from a holding company: Re Spark Infrastructure RE Ltd (2021) 156 ACSR 257; [2021] NSWSC 1385 at [31]–[32]. I am satisfied that there is here sufficient evidence of BidCo’s capacity to fund the scheme consideration and the mechanisms adopted here are otherwise sufficient to address performance risk, consistent with the approach taken in Re Sydney Airport Ltd and The Trust Company (Sydney Airport) Ltd as responsible entity for Sydney Airport Trust 1 [2022] NSWSC 25 at [40]; Re ELMO Software Pty Ltd [2023] NSWSC 12 at [27]–[28] (“ELMO”).
Third, Mr Giles notes that a break fee of $7,418,000 (exclusive of GST) is payable by CreditorWatch to BidCo if, within 12 months after the date of termination of the SID, CreditorWatch and a third party complete a Competing Proposal (as defined) in respect of 50.1% or more of the CreditorWatch shares, or the sale of all or substantially all of the assets or business conducted by CreditorWatch. No reverse break fee is payable by BidCo to CreditorWatch under the terms of the SID. Mr Giles submits, and I accept, that the circumstances in which the break fee is payable do not depart from accepted practice, where no break fee is payable merely because the scheme resolution is not approved by the requisite majorities of CreditorWatch shareholders, or because the Court declines to approve the scheme. The amount of the break fee represents approximately 1% of the implied equity value of CreditorWatch implied by the cash consideration, and is within the Takeover Panel’s guidance as to break fees.
Fourth, Mr Giles notes that clauses 9.2 to 9.4 of the SID include notification of approach, “no shop”, “no talk” and “no due diligence” obligations. The "no talk" and "no due diligence" restrictions are subject to a fiduciary exception. The "Exclusivity Period" runs from and including 12 May 2026 (the date of the SID) to the earlier of the date of termination of the SID; the End Date (being 12 February 2027); and the implementation date. BidCo also has a matching right under the SID in respect of Competing Proposals (as defined) determined by the CreditorWatch board to be superior proposals. I accept that the exclusivity provisions are sufficiently disclosed in the scheme booklet and are in a form that has previously been accepted by the Court, and the exclusivity period is not unreasonable in the circumstances of the transaction: ELMO at [29].
Fifth, Mr Giles points out that CreditorWatch has two classes of shares on issue, namely 4,633,574 ordinary shares and 442,764 management shares. Management shares in CreditorWatch were issued to eligible employees and non-executive directors under the CreditorWatch Long Term Incentive Plans (“CreditorWatch LTIPs”) and have limited voting rights other than in specified circumstances. That limitation on voting rights is subject to a once and for all waiver by the board, which has not occurred, under CreditorWatch’s constitution. Mr Giles notes that the scheme contemplates that all CreditorWatch shares, including management shares, be transferred to BidCo. He also points out that, under the CreditorWatch LTIPs, the scheme will constitute an Exit Event (as defined) so that the holders of management shares will be entitled to the same or equivalent value of consideration as an ordinary share in CreditorWatch on a disposal. Mr Giles notes that, absent any order made by the Court, there may be doubt whether holders of management shares would be entitled to vote at the scheme meeting.
Mr Giles refers to the views expressed by Santow J in Re Advance Bank Australia Ltd (No 2) (1997) 22 ACSR 513 and to the approach that his Honour took, albeit as matter of construction, in Re CMPS & F Pty Ltd (1997) 24 ACSR 728. He also draws attention to authority that the test for inclusion in voting at a scheme meeting is whether the shareholders are "concerned in the arrangement": Re Cashcard Australia Ltd (2004) 48 ACSR 738; [2004] FCA 223 at [10]; Re Lehman Brothers Australia Ltd (in liq) (No 2) (2013) 95 ACSR 685; [2013] FCA 965 at [63]. He submits that:

I accept that the Court’s powers under s 1319 of the Act are sufficiently broad to support a direction that management shareholders be permitted to vote at the scheme meeting, and I accept that such an order would be consistent with the intended acquisition of the management shares under the scheme. I will make such an order. I also accept Mr Giles’ submission that, where that order is made, holders of management shares and holders of ordinary shares should vote in a single class at the scheme meeting, where management shareholders and ordinary shareholders would receive the same scheme consideration and where the difference in the voting rights of holders of management and ordinary shares in general meetings would not make it impossible for them to consult together as a class in a scheme meeting.
Sixth, Mr Giles notes that the scheme contains deemed warranties, as disclosed in the scheme booklet: ELMO at [32].
Seventh, Mr Giles addresses the provision, in respect of the scheme consideration, for repayment of loans made in connection with the issue of management shares under the CreditorWatch LTIPs. Where a scheme shareholder has an outstanding LTIP loan, the cash consideration is first applied to repay that LTIP loan before any remaining consideration is paid to the scheme shareholder, and that matter is disclosed in the scheme booklet. I accept that the proposed treatment of the LTIP loans does not prevent holders of management shares with LTIP loans and holders of ordinary shares from consulting together with a view to their common interest, so as to vote in a single class at the scheme meeting, and the reduction of consideration required by the repayment of outstanding employee loans has previously not been held to require a separate voting class: Re Webster Ltd [2019] NSWSC 1907; Re Probiotec Ltd [2024] FCA 298.
Eighth, Mr Giles notes that the proposed scheme provides that CreditorWatch shareholders who would, as a result of an election for mixed consideration, receive less than 135 TopCo shares, are unable to receive the mixed consideration. This threshold, based on the issue price of TopCo shares of $74.55, is approximately $10,064. Ms Seppelt’s evidence indicates that there are currently no shareholders on CreditorWatch's share register who would fall within this category; approximately 256 of 431 holders of units over shares held by CreditorWatch's Employee Trustee would be treated as “Small Shareholders” under the proposed scheme; and the overall percentage of CreditorWatch shares that are held by Small Shareholders (including those held through the Employee Trustee) is 0.17%. I accept that this is not a reason not to convene the scheme meeting, where persons falling within this category will receive the cash consideration.
Ninth, Mr Giles notes that, on implementation of the scheme, TopCo shares to which scheme shareholders (other than Mr Beck) who make a valid election to receive the mixed consideration are entitled, will be issued to a nominee company to hold as bare trustee on behalf of those scheme shareholders. This arrangement reflects a limitation that TopCo may not have more than 50 shareholders, except with the approval of the Warburg Pincus shareholders in TopCo or in connection with an initial public offering, and the nominee arrangements are disclosed in the scheme booklet. Mr Giles recognises that ASIC has previously expressed concern about offers of “stub equity” consideration in control transactions in circumstances including where the consideration offered is shares in an Australian proprietary company and accepting shareholders are required to hold the offered scrip consideration through a custodial arrangement: ASIC Consultation Paper 312 Stub equity in control transactions; Re Capilano Honey Ltd (2018) 131 ACSR 9; [2018] FCA 1568 at [35]–[53]. ASIC Corporations (Stub Equity in Control Transactions) Instrument 2020/734 in turn modifies the Act to prevent the use of Australian proprietary companies as “stub equity” vehicles but permits bidders to make “stub equity” offers using an Australian public company with compulsory custodial arrangements on specified conditions. The "stub equity" proposed to be offered by TopCo to scheme shareholders appears to comply with the requirements of ASIC Corporations (Stub Equity in Control Transactions) Instrument 2020/734. I accept that the scheme booklet discloses the nature of TopCo shares and the risks involved in scheme shareholders choosing the mixed consideration, including the lack of liquidity of TopCo shares, risks attached to being a minority shareholder in TopCo, and several additional risks. I accept that, where such an arrangement complies with ASIC Corporations (Stub Equity in Control Transactions) Instrument 2020/734 and its risks are disclosed, then it provides no reason why the Court would not convene the scheme meeting or approve the scheme: Re Aveo Group Ltd and Aveo Funds Management Ltd [2019] NSWSC 1348 at [34]; Re BINGO Industries Ltd [2021] NSWSC 798 at [17]–[21]; Re McGrath Ltd [2024] NSWSC 555 at [20]–[21]; Re Apiam Animal Health Ltd [2025] NSWSC 1563 at [19].
Tenth, Mr Giles notes that CreditorWatch proposes to operate an inbound shareholder line to address shareholder queries in respect of the scheme. The relevant script is in evidence. Mr Giles also points to several previous public statements in respect of the proposed scheme, which were broadly similar to the announcements of a proposed scheme that are typically made by public companies to Australian Securities Exchange, including an email sent by CreditorWatch to its staff about the proposed transaction; a letter from CreditorWatch’s Chair to its shareholders which, among other things, summarised the proposed scheme and the Court process for the scheme; and a “town hall meeting” which CreditorWatch held for its staff, some of whom are also shareholders, notifying them of the transaction and providing an overview of the process. CreditorWatch discloses these communications to the Court but, in accordance with recent practice, does not seek the Court’s approval for them. No issue arises from these communications which is likely to cause difficulty at the second Court hearing.
These matters, separately and together, give rise to no reason not to convene the scheme meeting.

In the matter of Commercial Credit Holdings Limited

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment

JUDGMENT

Affidavit and other evidence

Matters relevant to whether to convene the scheme meeting

Several other matters

Exercise of the Court’s discretion whether to convene the scheme meeting

Orders

Legislation Cited (2)

Cases Cited (28)