Avocet Resources Limited, in the matter of Avocet Resources Limited (No 2) [2013] FCA 721

Avocet Resources Limited, in the matter of Avocet Resources Limited (No 2) [2013] FCA 721

The Court approved the Scheme because the evidence established compliance with the relevant procedural and legislative requirements, ASIC had no objection, the statutory shareholder majorities were met by overwhelming approval, the Scheme was fair and reasonable and commercially beneficial to shareholders, there was proper disclosure, and there was no evidence of bad faith or improper purpose. The Court also exempted Avocet from s 411(11) because, once the Scheme was implemented, Avocet would become a wholly owned subsidiary of Lion One and there was no apparent utility in annexing the approval orders to Avocet's Constitution.

Jurisdiction
Australia
Judgment Date
24 July 2013
Procedural Posture
Application for Approval of a Scheme of Arrangement Under S 411(4)(b) of the Corporations Act 2001 (cth) / Second Court Hearing
Outcome
Scheme of arrangement approved and exemption from compliance with s 411(11) granted.
Legal Topics
['scheme of Arrangement' 'shareholder Approval' 'asic No Objection' 'exemption From Compliance With S 411(11) of the Corporations Act 2001 (cth)']
['corporations Law'] ['scheme of Arrangement' 'shareholder Approval' 'asic No Objection' 'exemption From Compliance With S 411(11) of the Corporations Act 2001 (cth)']

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Procedural Posture

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

Legal Issues

  1. 1 ["Whether the procedural requirements imposed by the Court's previous orders, the Corporations Act 2001 (Cth), the Federal Court (Corporations) Rules 2000 (Cth) and Avocet's Constitution had been met." 'Whether the majority of Avocet shareholders acted in good faith and not for an illegitimate purpose in approving the Scheme.' 'Whether the Scheme was properly proposed and sufficiently fair and reasonable for an intelligent, honest person to approve it.' 'Whether Avocet should be exempted under s 411(12) of the Corporations Act 2001 (Cth) from compliance with s 411(11).']

Ratio Decidendi

The Court approved the Scheme because the evidence established compliance with the relevant procedural and legislative requirements, ASIC had no objection, the statutory shareholder majorities were met by overwhelming approval, the Scheme was fair and reasonable and commercially beneficial to shareholders, there was proper disclosure, and there was no evidence of bad faith or improper purpose. The Court also exempted Avocet from s 411(11) because, once the Scheme was implemented, Avocet would become a wholly owned subsidiary of Lion One and there was no apparent utility in annexing the approval orders to Avocet's Constitution.

Court Disposition

Scheme of arrangement approved and exemption from compliance with s 411(11) granted.

Orders

  • ['Pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the Plaintiff and its shareholders, a copy of which is annexed hereto and marked "A", is approved.' 'Pursuant to section 411(12) of the Act, the Plaintiff be exempted from compliance with section 411(11) of...