Konekt Limited, in the matter of Konekt Limited (No 3) [2019] FCA 2105

Konekt Limited, in the matter of Konekt Limited (No 3) [2019] FCA 2105

The Court approved the scheme because the scheme meeting was held in accordance with its orders, the statutory majorities under s 411(4)(a)(ii) were comfortably achieved, all relevant conditions had been satisfied, ASIC had no objection, no shareholder opposed the orders, there had been full and fair disclosure, an intelligent and honest shareholder properly informed and acting alone might approve the scheme, and the directors' view that the Dividend Loan and Special Dividend would not materially prejudice Konekt's ability to pay its creditors was reasonable and open to them to hold.

Jurisdiction
Australia
Judgment Date
09 December 2019
Procedural Posture
Application Under S 411 of the Corporations Act 2001 (cth) for Approval of a Members' Scheme of Arrangement / Second Court Hearing; Scheme Approval Orders Made
Outcome
Application granted; scheme of arrangement approved and exemption from s 411(11) compliance granted.
Legal Topics
["members' Scheme of Arrangement" 'court Approval of Scheme of Arrangement' 'financial Assistance' 'special Dividend' 'dividend Loan' 'shareholder Approval']
['corporations Law'] ["members' Scheme of Arrangement" 'court Approval of Scheme of Arrangement' 'financial Assistance' 'special Dividend' 'dividend Loan' 'shareholder Approval']

Case Brief

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Procedural Posture

Application Under S 411 of the Corporations Act 2001 (cth) for Approval of a Members' Scheme of Arrangement / Second Court Hearing; Scheme Approval Orders Made

Legal Issues

  1. 1 ["Whether the scheme meeting was convened and held in accordance with the Court's orders." 'Whether the resolution to approve the scheme was passed by the requisite statutory majorities and other statutory requirements were satisfied.' 'Whether all conditions to the scheme other than Court approval and lodgement of orders with ASIC had been satisfied or waived.' 'Whether the scheme was fair and reasonable so that an intelligent and honest Konekt shareholder, properly informed and acting alone, might approve it.' 'Whether there was full and fair disclosure to shareholders of all material information relevant to voting on the scheme.' "Whether the directors' view that calling on the Dividend Loan to pay the Special Dividend would not materially prejudice Konekt's ability to pay its creditors was reasonable and open to them to hold."]

Ratio Decidendi

The Court approved the scheme because the scheme meeting was held in accordance with its orders, the statutory majorities under s 411(4)(a)(ii) were comfortably achieved, all relevant conditions had been satisfied, ASIC had no objection, no shareholder opposed the orders, there had been full and fair disclosure, an intelligent and honest shareholder properly informed and acting alone might approve the scheme, and the directors' view that the Dividend Loan and Special Dividend would not materially prejudice Konekt's ability to pay its creditors was reasonable and open to them to hold.

Court Disposition

Application granted; scheme of arrangement approved and exemption from s 411(11) compliance granted.

Orders

  • ['Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth), the scheme of arrangement between Konekt Limited (ACN 009 155 971) and holders of fully paid ordinary shares in Konekt in the form set out in exhibit 11, be approved.' 'Pursuant to s 411(12) of the Corporations Act, Konekt Limited (ACN 009 155 971) be...