Old Mutual Plc, Re

Old Mutual Plc, Re

Section 641(2A) CA 2006 does not bar the reductions of capital in the Schemes as they are intra-group restructurings with legitimate commercial purposes, not external takeovers; the Demerger Reduction will not result in inability to discharge liabilities due to the Locked Box arrangement; a single class of members is appropriate for scheme meetings.

Parties
Applicant: Old Mutual plc; Interested Party: HMRC; Creditor: Bank of America Merrill Lynch International Ltd; Creditor: St Paul Travelers Companies Inc; Counterparty: Merrill Lynch International, JP Morgan Securities plc, Goldman Sachs International
Jurisdiction
England and Wales
Judgment Date
20 April 2018
Procedural Posture
Companies Scheme of Arrangement / Application for Permission to Convene Scheme Meetings
Outcome
Permission granted to convene scheme meetings; provisional reassurance given regarding section 641(2A) and creditor protection.
Legal Topics
Schemes of Arrangement, Reduction of Capital, Class Constitution, Protection of Creditors
Company Law Insolvency Law Schemes of Arrangement Reduction of Capital Class Constitution Protection of Creditors

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Parties

Old Mutual plc

Applicant

HMRC

Interested Party

Bank of America Merrill Lynch International Ltd

Creditor

St Paul Travelers Companies Inc

Creditor

Merrill Lynch International, JP Morgan Securities plc, Goldman Sachs International

Counterparty

Procedural Posture

Companies Scheme of Arrangement / Application for Permission to Convene Scheme Meetings

Legal Issues

  1. 1 Whether reductions of capital in the Schemes are barred by section 641(2A) Companies Act 2006
  2. 2 Whether the Demerger Reduction will result in inability to discharge liabilities to creditors
  3. 3 Appropriate class constitution for scheme meetings

Ratio Decidendi

Section 641(2A) CA 2006 does not bar the reductions of capital in the Schemes as they are intra-group restructurings with legitimate commercial purposes, not external takeovers; the Demerger Reduction will not result in inability to discharge liabilities due to the Locked Box arrangement; a single class of members is appropriate for scheme meetings.

Court Disposition

Permission granted to convene scheme meetings; provisional reassurance given regarding section 641(2A) and creditor protection.

Orders

  • Orders convening separate scheme meetings for the two Schemes as requested by the Company.
  • Recital reflecting provisional views on section 641(2A) CA 2006 and absence of need for settlement of a list of creditors pursuant to section 646 CA 2006.