Schemes of Arrangement (LAWS70316)

In the field of takeovers, company mergers and other corporate reconstructions, schemes of arrangement are playing an ever increasing role. In the takeover sphere, schemes have often been used in recent times as an alternative to using the takeover provisions in Chapter 6 of the Corporations Act 2001 (Cth). This subject will address what a scheme of arrangement is and the role that schemes play in these fields of commercial activity, particularly in the area of takeovers. The role played by the court and the Australian Securities and Investment Commission (ASIC) at each relevant stage of the scheme process as well as practical considerations and guidance in connection with obtaining court approval to a scheme are among the topics that will be addressed in this subject. The lecturers are both commercial barristers at the Victorian Bar whose areas of practice include schemes of arrangement.

Principal topics will include:

• What a scheme of arrangement is and the role schemes play in the field of takeovers, company mergers and other corporate reconstructions
• The statutory framework applicable to schemes of arrangement
• Statutory and other requirements governing schemes of arrangement and their approval
• The role of the court at each of the first court hearing (the ‘meeting hearing’) and the second court hearing (the ‘approval hearing’)
• The role of ASIC
• Practical considerations and guidance – including potential pitfalls – in connection with the approval process
• Issues that are to be considered and addressed in connection with the obtaining of shareholder and court approval. Topics to be drawn from matters such as:
  • Notice requirements
  • The scheme booklet: Content and approval
  • Meetings of shareholders: How, what, when and why
  • Classification of schemes and classes of members
  • Independent experts
  • Break fees and exclusivity provisions
  • Warranties and performance risk
  • Overseas interests
  • Impact on third parties: Chapter 6 avoidance, ASIC position and Section 411(17) of the Corporations Act 2001 (Cth)
  • Abrogation of fiduciary duties
  • Forum consideration and differing judicial approaches
  • Opposition at court hearings and the court’s ‘approval’ discretion
• Reform issues and consequences and the role and impact of the Corporations and Markets Advisory Committee on the future regulation of schemes. This subject does not address schemes of arrangement in the insolvency context.