In the matter of Wollongong Coal Limited and Jindal Steel & Coal Australia Pty Ltd [2020] NSWSC 73

In the matter of Wollongong Coal Limited and Jindal Steel & Coal Australia Pty Ltd [2020] NSWSC 73

The schemes of arrangement are fair, reasonable, and in the creditors' best interests, having been overwhelmingly approved, supported by an independent expert, disclosing all material risks, compliant with all relevant procedural requirements (including late publication of notice, as abridged), and raising no valid objections from creditors or affected shareholders; any contravention of s 208 Corporations Act does not invalidate related guarantee contracts (s 209(1)); use of conditions subsequent is acceptable where terms are clear; the minor scheme amendment proposed is permissible.

Jurisdiction
Australia
Judgment Date
14 February 2020
Procedural Posture
Scheme of Arrangement Approval Application / Second Court Hearing; Approval of Schemes of Arrangement Under S 411(4)(b) Corporations Act 2001 (cth)
Outcome
Schemes of arrangement approved (with minor amendment). Ancillary procedural orders made.
Legal Topics
['schemes of Arrangement' 'creditor Restructuring' 'court Approval' 'secured Lending' 'minority Creditor Rights']
['corporations Law' 'equity'] ['schemes of Arrangement' 'creditor Restructuring' 'court Approval' 'secured Lending' 'minority Creditor Rights']

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Procedural Posture

Scheme of Arrangement Approval Application / Second Court Hearing; Approval of Schemes of Arrangement Under S 411(4)(b) Corporations Act 2001 (cth)

Legal Issues

  1. 1 ['Whether the proposed schemes of arrangement should be approved under s 411(4)(b) of the Corporations Act 2001 (Cth)' 'Whether use of conditions subsequent in the schemes is acceptable' 'Whether the change of governing law under the Axis facility to New South Wales law is a reason to decline approval' 'Whether the absence of shareholder approval for guarantees given by Wollongong Coal to lenders contravenes Corporations Act s 208 and affects the scheme' 'Whether the amendment to insert the name of the Independent Adjudicator is a permissible alteration to the scheme']

Ratio Decidendi

The schemes of arrangement are fair, reasonable, and in the creditors' best interests, having been overwhelmingly approved, supported by an independent expert, disclosing all material risks, compliant with all relevant procedural requirements (including late publication of notice, as abridged), and raising no valid objections from creditors or affected shareholders; any contravention of s 208 Corporations Act does not invalidate related guarantee contracts (s 209(1)); use of conditions subsequent is acceptable where terms are clear; the minor scheme amendment proposed is permissible.

Court Disposition

Schemes of arrangement approved (with minor amendment). Ancillary procedural orders made.

Orders

  • ["The schemes of arrangement between each plaintiff and its classes of creditors (lenders under the relevant facilities) are approved pursuant to s 411(4)(b) and (6) of the Corporations Act 2001 (Cth), in the agreed forms, subject to inserting 'David James Walter' and 'Baker McKenzie' as Independent Adjudicator in...