Separate meetings of each group - mergers and winding up, Business Law and Ethics

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Separate meetings of each group - mergers and winding up:

The first ground of objection was valid, ie. if within a single class of shareholders there are groups whose interests in the scheme are clearly different and opposed, approval must be obtained from separate meetings of each group.

The second objection was also upheld (though it was not necessary to decide this point as the scheme was disapproved on the first ground).  In an earlier case, however, Re National Bank (1966), the court rejected this argument as there is nothing in the statutory rules to prohibit the use of a scheme of arrangement to effect a take-over bid.

A second requirement is that the company concerned shall show its support for the scheme since s.207 relates to schemes of arrangement "between" a company and its members or creditors.  Hence a member cannot obtain a court order for calling meetings if the company itself is opposed to the scheme: Re Savoy Hotel (1981).


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