Velocys Plc, Re

Velocys Plc, Re

There is no jurisdictional or legal roadblock to convening a single meeting of Scheme Shareholders, despite the sanctions affecting Mr Davidovich, because the scheme and convening order contain adequate safeguards to prevent unlawful activity and the differences in rights are not so significant as to fracture the class.

Parties
Applicant: Velocys PLC; Respondents: Scheme Shareholders (including Mr David Davidovich)
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Scheme of Arrangement Under Companies Act 2006 / Application for Convening Order
Outcome
Order granted
Legal Topics
Scheme of Arrangement, Class Composition, UK Sanctions Regulations, Shareholder Rights
Company Law Sanctions Law Scheme of Arrangement Class Composition UK Sanctions Regulations Shareholder Rights

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Parties

Velocys PLC

Applicant

Scheme Shareholders (including Mr David Davidovich)

Respondents

Procedural Posture

Scheme of Arrangement Under Companies Act 2006 / Application for Convening Order

Legal Issues

  1. 1 Whether the presence of a sanctioned shareholder (Mr Davidovich) prevents the convening of a single class meeting for a scheme of arrangement
  2. 2 Whether the scheme as proposed would require or encourage unlawful activity under UK sanctions regulations
  3. 3 Whether the class of Scheme Shareholders is fractured by the sanctions affecting Mr Davidovich

Ratio Decidendi

There is no jurisdictional or legal roadblock to convening a single meeting of Scheme Shareholders, despite the sanctions affecting Mr Davidovich, because the scheme and convening order contain adequate safeguards to prevent unlawful activity and the differences in rights are not so significant as to fracture the class.

Court Disposition

Order granted

Orders

  • A single meeting of Scheme Shareholders is to be convened to consider and, if thought fit, approve the scheme of arrangement.
  • The chair of the meeting has discretion to disallow votes if advised it would be unlawful, with the right for the affected shareholder to raise the issue at the sanction hearing.