(e) Decision His Honour held that the receivers' costs should not be recovered out of the assets of the defendants. His Honour stated that ASIC may, however, apply again for the orders as circumstances change. French J ordered Mr to present himself for examination by ASIC and the receivers. His Honour found that there is a real possibility that the disclosure affidavits signed by Mr Carey had failed to disclose the full extent of assets or property owned or controlled by him or in relation to which he had an interest. 5.4 Approving a scheme of arrangement under section 411(4) of the Corporations Act (By David van Dieren, Mallesons Stephen Jaques) Re HIH Casualty and General Insurance Limited [2006] NSWSC 485, New South Wales Supreme Court, Barrett J, 26 May 2006 The full text of this judgment is available at: or http://cclsr.law.unimelb.edu.au/judgments/search/advcorp.asp (a) Summary Part 5.1 of the Corporations Act 2001 (the Act) provides for a mechanism by a corporation may enter into a legally enforceable scheme of arrangement or compromise with its creditors. A scheme of arrangement allows a company to reach an agreement with its creditors to defer, rearrange or extinguish its obligations. This arrangement or compromise must be approved by creditors at meetings duly convened in accordance with section 411(1) of the Act and be sanctioned by an order of the court under section 411(4). This case concerns certain subsidiaries of HIH Insurance Ltd (the Scheme companies) seeking an order of the court under section 411(4)(b) to have a scheme of arrangement or compromise (the Scheme) approved. In determining whether the court should give approval to the Scheme, Barrett J examined the following matters: whether the creditors relevant to the Scheme were appropriately identified; whether the procedure of the meeting of creditors complied with proper procedure contemplated by section 411(1); whether any creditors will be treated in a discriminatory manner that causes them to be, for the purposes of section 411, a class of creditors distinct and separate from the remainder of the creditors; and
(e) Decision His Honour held that the receivers' costs should not be recovered out of the assets of the defendants. His Honour stated that ASIC may, however, apply again for the orders as circumstances change. French J ordered Mr to present himself for examination by ASIC and the receivers. His Honour found that there is a real possibility that the disclosure affidavits signed by Mr Carey had failed to disclose the full extent of assets or property owned or controlled by him or in relation to which he had an interest. 5.4 Approving a scheme of arrangement under section 411(4) of the Corporations Act (By David van Dieren, Mallesons Stephen Jaques) Re HIH Casualty and General Insurance Limited [2006] NSWSC 485, New South Wales Supreme Court, Barrett J, 26 May 2006 The full text of this judgment is available at: or http://cclsr.law.unimelb.edu.au/judgments/search/advcorp.asp (a) Summary Part 5.1 of the Corporations Act 2001 (the Act) provides for a mechanism by a corporation may enter into a legally enforceable scheme of arrangement or compromise with its creditors. A scheme of arrangement allows a company to reach an agreement with its creditors to defer, rearrange or extinguish its obligations. This arrangement or compromise must be approved by creditors at meetings duly convened in accordance with section 411(1) of the Act and be sanctioned by an order of the court under section 411(4). This case concerns certain subsidiaries of HIH Insurance Ltd (the Scheme companies) seeking an order of the court under section 411(4)(b) to have a scheme of arrangement or compromise (the Scheme) approved. In determining whether the court should give approval to the Scheme, Barrett J examined the following matters: whether the creditors relevant to the Scheme were appropriately identified; whether the procedure of the meeting of creditors complied with proper procedure contemplated by section 411(1); whether any creditors will be treated in a discriminatory manner that causes them to be, for the purposes of section 411, a class of creditors distinct and separate from the remainder of the creditors; and
CORPORATE-LAW-ELECTRONIC-BULLETIN-June-2006.docx