Second of three posts on legal aspects of this innovative scheme of arrangement
On 18 March 2011 the High Court sanctioned a scheme of arrangement (the Scheme) between Uniq plc (Uniq) and its members. The Scheme judgment is here. The result of the Scheme, and the restructuring of which it was a part (the Restructuring), is that 90% of Uniq’s equity will be transferred to a specially-incorporated vehicle and, hopefully, sold for the benefit of the defined benefit part of Uniq’s pension scheme. The shareholders in Uniq will be left with one-tenth of their previous holding in Uniq’s equity, and Uniq and its subsidiaries will be released from their obligations to the defined benefit part of the pension scheme.
The first post looks at the reason for, and the use of the Scheme to achieve, the Restructuring. This second post discusses a narrower point of company law that arose during the Restructuring: whether it is possible to amend a special resolution. The third post in this series sets out the basis on which the court exercised its discretion to approve the Scheme.
General rule: There is no scope for amending a special resolution…
Section 283(6)(a) of the Companies Act 2006 states that where a resolution is passed at a meeting, “the resolution is not a special resolution unless the notice of the meeting included the text of the resolution…”. As a result, it is generally not possible to amend the text of a special resolution where that text is set out in a meeting notice.
…unless it appears from the resolution text, when read with the accompanying circular, that an error have been made
The special resolution to effect the Scheme stated that 14,993,817 new shares would be issued. That figure was an error, and should have read 114,993,817.
This error was noticed before the meeting to consider the special resolution was held. The Scheme judgment records that the problem was dealt with by applying Re Willaire Systems plc [1987] BCLC 67. If it is clear – when the resolution is read alongside the accompanying circular – that an error have been made in the resolution, then the resolution can be read as a matter of construction as if the error had not been made. In the words of the judgment, there was “no ambiguity or room for doubt” as to what the correct number of shares in the resolution should have been. The judgment in Re Uniq approved the following procedure:
- The error was notified by the chairman to the meeting called to approve the Scheme and to consider the special resolution.
- The resolution was proposed and passed as set out in the meeting notice.
- But with the meeting agreeing, and the minutes stating, that it should be read as relating to the correct figure.
The judgment referred to this as “a correct procedure and the resolution takes effect as clearly intended”.
The final post in this series will discuss how the judge addressed the question of whether the Scheme was of benefit to the Uniq shareholders who approved the Scheme.
UPDATE 13 July 2011: Greencore Group plc has now made an agreed cash offer to acquire all of the shares in Uniq. Angel Street, the special purpose vehicle that holds 90.2% of Uniq for the benefit of the pension scheme following the Restructuring, has irrevocably agreed to accept the Greencore offer. We discuss the Greencore offer in this post.
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