Amerisur Resources Plc, Re Companies Act 2006

On a members’ scheme of arrangement, the court’s primary concern is the interests of the scheme participants. Third-party creditor concerns may be considered where they arise from the scheme or from an inevitable and sufficiently connected step dependent on its implementation. The court must assess the scheme in its full commercial and factual context, including relevant ancillary arrangements. It need not impose conditions addressing speculative, uncertain or remote consequences which could occur without the scheme or court sanction. A scheme transferring shares to a purchaser does not, without more, affect creditors’ interests merely because the acquisition may make a future relocation or transfer of assets more likely.

Amerisur Resources plc applied for sanction of a scheme transferring all members’ shares to Bidco, a company within the purchasing group. The statutory requirements were otherwise satisfied, and the members’ meeting was sufficiently representative despite low numerical turnout.

Claimants in separate Queen’s Bench Division proceedings objected to sanction, seeking an undertaking that the company maintain at least £6.9 million in unencumbered UK assets. They relied on a freezing order obtained for existing and imminent claimants, and on possible future relocation of the company’s business and assets outside the United Kingdom following the acquisition. The central issue was whether those concerns were sufficiently connected with the scheme to justify refusing sanction or imposing the proposed condition.

1. Application granted. The scheme was sanctioned. The claimants’ request for a condition requiring the maintenance of £6.9 million in unencumbered UK assets was refused.
2. Creditors and other third parties may have standing to be heard at a members’ scheme sanction hearing. The court may consider consequences arising from a subsequent step where that step is clearly dependent on, consequent upon and sufficiently connected with the scheme. This reflects the approach in BAT Industries plc (unreported, 3 September 1998) and the consideration of ancillary arrangements described in Re Baltic Exchange Ltd [2016] EWHC 3391.
3. The scheme itself merely imposed the transfer of shares on non-consenting members. It did not transfer or encumber company assets and had no effect on creditors’ interests. The feared relocation or transfer of assets was neither certain nor imminent, and could be undertaken without a scheme or court sanction.
4. The circumstances were materially different from BAT Industries plc. Any future asset transfer would also have to comply with UK company law, including protections for creditors. The objection therefore sought to use the scheme-sanction process as an alternative route around the limits of the existing freezing order, without the associated cross-undertaking in damages.
5. As the remaining sanction requirements were satisfied, the court made the order sanctioning the scheme.