WebCentral Group Limited, in the matter of WebCentral Group Limited (No 2) [2006] FCA 1203

WebCentral Group Limited, in the matter of WebCentral Group Limited (No 2) [2006] FCA 1203

The Court approved the scheme of arrangement, but subject to the deletion of the 'no encumbrances' clause, because its retention could mislead security holders that their interests were adversely affected; in substance, the scheme cannot affect the interests of holders of security over shares, and it is preferable to omit the clause to avoid unnecessary concern.

Jurisdiction
Australia
Judgment Date
12 September 2006
Procedural Posture
Corporations – Scheme of Arrangement / Final Approval Hearing (second Court Hearing)
Outcome
Scheme of arrangement approved, subject to deletion of 'no encumbrances' clause.
Legal Topics
['scheme of Arrangement' 'court Approval of Scheme' 'no Encumbrances Clause' 'security Interests in Shares']
['corporations Law'] ['scheme of Arrangement' 'court Approval of Scheme' 'no Encumbrances Clause' 'security Interests in Shares']

Case Brief

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Procedural Posture

Corporations – Scheme of Arrangement / Final Approval Hearing (second Court Hearing)

Legal Issues

  1. 1 ["Whether the Court should approve a scheme of arrangement containing a 'no encumbrances' clause" 'Effect of court-approved scheme on security interests over shares']

Ratio Decidendi

The Court approved the scheme of arrangement, but subject to the deletion of the 'no encumbrances' clause, because its retention could mislead security holders that their interests were adversely affected; in substance, the scheme cannot affect the interests of holders of security over shares, and it is preferable to omit the clause to avoid unnecessary concern.

Court Disposition

Scheme of arrangement approved, subject to deletion of 'no encumbrances' clause.

Orders

  • ["Scheme of arrangement between the plaintiff and its members (other than specified persons) approved subject to alterations: deletion of the date '14 July 2006' from the first page; amendment of the definition of 'Deed Poll' in clause 1.1; deletion of clause 9.3(b) and relettering; scheme as altered annexed."...