2016 (1) TMI 1328 - HC - Companies Law

Scheme of Arrangement in the nature of Demerger - Held that - In light of the facts and circumstances, the applicant has sought dispensation from holding of such meetings of the creditors. Considering the facts and submissions, the said dispensation of the meetings of the creditors of the applicant Resulting Company is granted.

Summary

Issues:
1. Scheme of Arrangement involving Demerger and Transfer of Hotel Management Undertaking
2. Dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors
3. Protection of Creditors' rights and interests in the proposed Scheme

Analysis:
1. The judgment pertains to a Scheme of Arrangement for the Demerger and Transfer of the Hotel Management Undertaking from one company to another, along with the restructuring of share capital, as per Sections 391 to 394 of the Companies Act, 1956, and other relevant provisions. The application for this Scheme is filed by the Resulting Company, seeking dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors. The Court notes that all Equity Shareholders have given written consent for the Scheme, and hence, dispensation for convening Equity Shareholders' meetings is granted.

2. The Court emphasizes the importance of protecting the rights and interests of Creditors in the proposed Scheme. The Affidavit submitted assures that the Scheme will not affect the Creditors' interests, and all liabilities towards Creditors will be fulfilled in the normal course of business. A Chartered Accountant's certificate confirms the financial standing of the Resulting Company pre and post-Scheme. While approval of Creditors is deemed unnecessary, the Resulting Company will obtain approval from Secured Creditors as per contractual obligations. The Court grants dispensation from holding meetings of the Creditors based on these submissions.

3. In conclusion, the Court disposes of the application in accordance with the submissions made regarding the Scheme of Arrangement. The judgment ensures compliance with legal provisions and safeguards the interests of stakeholders involved in the proposed Demerger and Transfer, while also upholding the financial commitments towards Creditors as per the Company's obligations.