International Law

CAMAC has published a discussion paper on Members? schemes of arrangement  (pdf)

Schemes of arrangement are a commonly used mechanism under the Corporations Act for achieving structural change within a company or a corporate group. They can be tailored to novel or complex corporate structures or be used for major group reconstructions. Members? schemes are increasingly used instead of takeover bids to achieve a change of corporate control.

The paper includes a review of factors that may influence the choice between schemes, takeover bids and reductions of share capital to effect a change of corporate control.

The paper invites submissions on a range of issues, including:

• whether the disclosure requirements for schemes should be amended to assist greater understanding by shareholders, for instance, by introducing a ?clear, concise and effective? disclosure requirement for the explanatory statement
• whether the procedure for determining classes of shareholders should be changed to permit earlier and binding determinations
• whether the headcount test should be amended or repealed
• whether ASIC should have modification powers for schemes comparable to those for takeover bids
• whether s 411(17), which relates to schemes that have been proposed for the purpose of avoiding the takeover provisions, should be repealed or amended.

The paper also considers whether the provisions for members? schemes:

• should accommodate holders of options over unissued shares or convertible notes
• should be extended to listed or unlisted managed investment schemes
• should be simplified for mergers within wholly-owned corporate groups
• should be adapted for use in schemes opposed by the target company.

The Committee is calling for submissions on the discussion paper by 26 September 2008