'Judge tears up CSR spin-off' is an article from the Sydney Morning Herald. It is about the Federal Court decision (Re CSR Ltd) to refuse to convene a shareholder meeting to approve a plan to demerge CSR Ltd into two companies. The demerger may have affected the capital available to meet asbestos victim claims. Some in the media believe that the decision to reject the demerger was unfairly influenced by the outcome of the James Hardie case.
The CSR case provides an interesting example of when public policy may influence corporate law.
Article in SMH
Full text of case
Sunday, April 18, 2010
CSR Ltd demerger
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Update (this decision has been overruled)
"CSR wins appeal to have demerger vote"
http://www.theaustralian.com.au/business/news/csr-wins-appeal-to-have-demerger-vote/story-e6frg90f-1225857322392
Doesn't say anything about reasons.
I found some material on the Federal Courts reasoning for allowing the demerger. Chief Justice Patrick Keane and Justice Peter Jacobson stated that ‘the prospect that the reduction in capital associated with the demerger of CSR may materially prejudice the ability of new CSR to pay all its creditors, including asbestos claimants, is not so clear as to warrant the conclusion that the scheme could never be approved.’
Consequentially, the demerger vote will be put to shareholders.
See, http://www.theaustralian.com.au/business/appeals-court-clears-csr-to-spin-off-sugar-division/story-e6frg8zx-1225857630121.
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