Warwick Resources Limited, in the matter of Warwick Resources Limited [2009] FCA 1231

Warwick Resources Limited, in the matter of Warwick Resources Limited [2009] FCA 1231

The Court granted orders to convene the shareholders and optionholders meetings because the proposed share scheme and option scheme were arrangements within the Corporations Act 2001 (Cth), ASIC had a reasonable opportunity to review the materials, the scheme booklet sufficiently disclosed the material elements, the optionholders had sufficient commonality of interest to vote in one meeting, the Black-Scholes methodology for valuing options and voting entitlements was appropriate, the exclusivity provisions and break fee did not raise concerns precluding the meetings, and there was no apparent reason why the schemes should not later receive Court approval if the required majorities were...

Jurisdiction
Australia
Judgment Date
19 October 2009
Procedural Posture
Application Under S 411(1) of the Corporations Act 2001 (cth) for Orders Convening Scheme Meetings / First Court Hearing; Orders Made for Convening Meetings to Consider Proposed Schemes of Arrangement
Outcome
Orders made granting leave to convene shareholders and optionholders meetings and approving dispatch and publication steps for the scheme booklet and notices.
Legal Topics
['schemes of Arrangement' 'share Scheme' 'option Scheme' 'convening Meetings' 'explanatory Statement' 'asic Review' 'optionholder Class Composition' 'black Scholes Valuation Methodology' 'exclusivity Provisions' 'break Fee']
['corporations Law'] ['schemes of Arrangement' 'share Scheme' 'option Scheme' 'convening Meetings' 'explanatory Statement' 'asic Review' 'optionholder Class Composition' 'black Scholes Valuation Methodology' 'exclusivity Provisions' 'break Fee']

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Procedural Posture

Application Under S 411(1) of the Corporations Act 2001 (cth) for Orders Convening Scheme Meetings / First Court Hearing; Orders Made for Convening Meetings to Consider Proposed Schemes of Arrangement

Legal Issues

  1. 1 ['Whether the proposed share scheme and option scheme fit within the statutory concept of arrangement or compromise under the Corporations Act 2001 (Cth).' 'Whether ASIC had a reasonable opportunity to examine the relevant materials and whether the scheme booklet sufficiently disclosed the material elements of the schemes.' 'Whether different tranches of optionholders had sufficient commonality of interest to vote at a single optionholders meeting.' 'Whether the Black-Scholes valuation methodology was appropriate for valuing Warwick options and determining optionholder voting entitlements.' 'Whether the no shop and no talk exclusivity provisions and the break fee raised any concern that should preclude the meetings from proceeding.' 'Whether there was any apparent reason why the schemes should not in due course receive Court approval if the necessary majorities were achieved.']

Ratio Decidendi

The Court granted orders to convene the shareholders and optionholders meetings because the proposed share scheme and option scheme were arrangements within the Corporations Act 2001 (Cth), ASIC had a reasonable opportunity to review the materials, the scheme booklet sufficiently disclosed the material elements, the optionholders had sufficient commonality of interest to vote in one meeting, the Black-Scholes methodology for valuing options and voting entitlements was appropriate, the exclusivity provisions and break fee did not raise concerns precluding the meetings, and there was no apparent reason why the schemes should not later receive Court approval if the required majorities were...

Court Disposition

Orders made granting leave to convene shareholders and optionholders meetings and approving dispatch and publication steps for the scheme booklet and notices.

Orders

  • ['Leave given to Warwick Resources Limited to convene a shareholders meeting on 30 November 2009 at 11.30 am (WST) to consider and, if thought fit, approve the Share Scheme.' 'Leave given to Warwick Resources Limited to convene an optionholders meeting on 30 November 2009 at 12.00 pm (WST), or as soon as possible...