DuluxGroup Limited, in the matter of DuluxGroup Limited (No 2) [2019] FCA 1225

DuluxGroup Limited, in the matter of DuluxGroup Limited (No 2) [2019] FCA 1225

Statutory requirements for approval of the scheme were satisfied; full and fair disclosure was made; the scheme was fair and reasonable and strongly supported by shareholders. The additional benefit to executive shareholders through loan forgiveness under the LTEIP did not affect class composition or overall scheme fairness, and did not preclude approval, especially in view of overwhelming shareholder support. ASIC raised no objection. Orders under s 411(4)(b) and exemption under s 411(12) were therefore appropriate.

Parties
Plaintiff: DuluxGroup Limited; Interested Person: Nippon Paint Holdings Co., Ltd
Jurisdiction
Australia
Judgment Date
06 August 2019
Procedural Posture
Corporations – Scheme of Arrangement Approval / Second Court Hearing – Final Approval of Members’ Scheme of Arrangement
Outcome
Scheme of arrangement approved under s 411(4)(b) of the Corporations Act 2001 (Cth); exemption from compliance with s 411(11) granted under s 411(12).
Legal Topics
Scheme of Arrangement, Court Approval, Shareholder Rights, Class Composition, ASIC Objection Letter, Loan Forgiveness Under Executive Incentive Plan
Corporations Law Scheme of Arrangement Court Approval Shareholder Rights Class Composition ASIC Objection Letter Loan Forgiveness Under Executive Incentive Plan

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Parties

DuluxGroup Limited

Plaintiff

Nippon Paint Holdings Co., Ltd

Interested Person

Procedural Posture

Corporations – Scheme of Arrangement Approval / Second Court Hearing – Final Approval of Members’ Scheme of Arrangement

Legal Issues

  1. 1 Whether to approve the scheme of arrangement under s 411(4)(b) of the Corporations Act 2001 (Cth)
  2. 2 Whether additional financial benefit to executive shareholders (via loan forgiveness) is relevant to court approval
  3. 3 Whether all statutory requirements, notice, and disclosure obligations have been met

Ratio Decidendi

Statutory requirements for approval of the scheme were satisfied; full and fair disclosure was made; the scheme was fair and reasonable and strongly supported by shareholders. The additional benefit to executive shareholders through loan forgiveness under the LTEIP did not affect class composition or overall scheme fairness, and did not preclude approval, especially in view of overwhelming shareholder support. ASIC raised no objection. Orders under s 411(4)(b) and exemption under s 411(12) were therefore appropriate.

Court Disposition

Scheme of arrangement approved under s 411(4)(b) of the Corporations Act 2001 (Cth); exemption from compliance with s 411(11) granted under s 411(12).

Orders

  • Scheme of arrangement between DuluxGroup Limited and Scheme shareholders approved under s 411(4)(b) of the Corporations Act 2001 (Cth).
  • DuluxGroup exempted from compliance with s 411(11) under s 411(12) of the Corporations Act 2001 (Cth) in relation to the scheme.