Re Almida Group Unlimited & Others

The court sanctioned a series of schemes of arrangement under Part 26 of the Companies Act 2006, relying on the amalgamation provisions in section 900. The judge identified and considered five issues at the sanction hearing: jurisdiction (in light of Noakes v Doncaster Amalgamated Collieries Ltd), compliance with the convening order, voting majorities, whether the scheme was fair to scheme members, and whether any defect made the scheme ineffective or unworkable.

The court was satisfied that Noakes had been addressed by extensive due diligence and consents (including a master consent document), that convening directions had been followed, that each single-member company had voted unanimously, and that the scheme was fair because it effected a straightforward consolidation while preserving stakeholders’ positions. Minor practical steps to ensure effectiveness were approved (funding dormant companies with a £1,000 loan, Holdings assuming post-effective-date liabilities by deed poll), and the court concluded there was no tax-avoidance purpose engaging the principle in Re Rylands-Whitecross. The scheme was therefore sanctioned under section 900(2).

The applicants sought the court's sanction for a proposed reorganisation of a subgroup of companies within the Schlumberger group by means of schemes of arrangement under Part 26 of the Companies Act 2006, using the amalgamation provisions in section 900 to transfer assets and liabilities of eleven English legacy companies to Schlumberger UK Holdings Limited ("Holdings"). The intended commercial outcome was to allocate shares in Holdings to the legacy companies (shares unlikely to be taken up) and to allow the legacy companies to be dissolved.

The proceedings followed a convening hearing on 18 August 2023 where Edwin Johnson J had determined each scheme company to be a "company" and its proposal to be an "arrangement" or "compromise" and directed single-class meetings. No stakeholder sought review of those findings.

The sanction hearing framed five issues: (i) jurisdiction under section 900, particularly in the light of Noakes v Doncaster Amalgamated Collieries Ltd and the requirement to avoid transfers of rights requiring third-party consent; (ii) compliance with the convening order; (iii) whether the requisite majorities had been obtained; (iv) whether the scheme was fair to scheme members; and (v) whether any defect rendered the scheme ineffective or unworkable.

On jurisdiction the court was satisfied that extensive due diligence and transactional steps (re-registering companies as unlimited, capital reductions, distributions in specie, adjustment of intra-group liabilities, obtaining consents and a master consent document) meant that Noakes did not prevent invocation of section 900. Compliance with the convening order was found. As each scheme company was single-member, meetings produced 100% attendance and approval. On fairness the court considered the scheme a simple consolidation that preserved stakeholders’ positions, including creditors. On potential defects the court accepted practical measures to ensure effectiveness: funding apparently assetless companies with a £1,000 loan; Holdings assuming post-effective-date liabilities under a deed poll so creditors would not need to restore dissolved companies; and the absence of any tax-avoidance purpose engaging the Re Rylands-Whitecross principle. Citing the established role of the court at sanction, the judge concluded the relief sought was within the scope of section 900(2) and sanctioned the schemes.

The court sanctioned the schemes of arrangement. The judge concluded that jurisdiction under section 900 was available after thorough due diligence and consent arrangements addressing the Noakes principle; that convening directions and voting requirements had been complied with (100% approval in single-member companies); that the schemes were fair to scheme members; and that no defect rendered the schemes ineffective, given the additional procedural safeguards (funding dormant companies, Holdings assuming liabilities by deed poll) and absence of tax-avoidance purpose. The sanction was ordered under section 900(2) of the Companies Act 2006.

The judgment follows a convening hearing before Edwin Johnson J on 18 August 2023 at which he held each applicant to be a company, the proposals to amount to arrangements for Part 26 purposes, and that the proposals constituted a reconstruction or amalgamation under section 900(1)(a); he directed single-class meetings. No stakeholder sought to review those determinations and the sanction application proceeded on that basis.