Old Mutual Plc, Re [2018] EWHC 873 (Ch) (20 April 2018)

Old Mutual Plc, Re [2018] EWHC 873 (Ch) (20 April 2018)

The reductions of capital in the First and Second Schemes do not infringe section 641(2A) CA 2006. The First Scheme is not a scheme by which any person acquires all shares in the Company, and the Second Scheme is exempted by section 641(2B) as it inserts a new parent undertaking with members retaining substantially the same proportions. The Schemes serve genuine commercial purposes and are not tax avoidance devices. There is no real likelihood that the Demerger Reduction will result in the Company being unable to discharge its liabilities to creditors, so it is appropriate to dispense with settlement of a list of creditors.

Citation
[2018] EWHC 873 (Ch)
Parties
Applicant: Old Mutual plc
Jurisdiction
England and Wales
Judgment Date
20 April 2018
Procedural Posture
Companies Court Application (schemes of Arrangement) / Application for Permission to Convene Scheme Meetings
Outcome
Permission granted to convene scheme meetings.
Legal Topics
Schemes of Arrangement, Reduction of Capital, Demerger, Parent Company Reorganisation, Protection of Creditors
Company Law Schemes of Arrangement Reduction of Capital Demerger Parent Company Reorganisation Protection of Creditors

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Parties

Old Mutual plc

Applicant

Procedural Posture

Companies Court Application (schemes of Arrangement) / Application for Permission to Convene Scheme Meetings

Legal Issues

  1. 1 Whether reductions of capital involved in the Schemes are barred by section 641(2A) Companies Act 2006
  2. 2 Whether the Demerger Reduction will result in the Company being unable to discharge liabilities owed to creditors and whether it is appropriate to dispense with settlement of a list of creditors under section 645 Companies Act 2006

Ratio Decidendi

The reductions of capital in the First and Second Schemes do not infringe section 641(2A) CA 2006. The First Scheme is not a scheme by which any person acquires all shares in the Company, and the Second Scheme is exempted by section 641(2B) as it inserts a new parent undertaking with members retaining substantially the same proportions. The Schemes serve genuine commercial purposes and are not tax avoidance devices. There is no real likelihood that the Demerger Reduction will result in the Company being unable to discharge its liabilities to creditors, so it is appropriate to dispense with settlement of a list of creditors.

Court Disposition

Permission granted to convene scheme meetings.

Orders

  • Separate scheme meetings for the First and Second Schemes to be convened as requested.
  • Matters of detail regarding notification, advertisement, and holding of meetings to be addressed separately.