Singer Manufacturing Company v Robinow
| Jurisdiction | Scotland |
| Judgment Date | 16 October 1970 |
| Date | 16 October 1970 |
| Docket Number | No. 2. |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION
CompanyManagementScheme of arrangementSanctionPrincipal feature of arrangement purchase of minority shareholdings by majority shareholderCompetencyCompanies Act, 1948 (11 and 12 Geo. VI, cap. 38), sec. 206.
Sec. 206 of the Companies Act, 1948, enables a company, inter alia, to enter into an arrangement with its members or any class of them.
The majority of the shares of a Scottish company were held by a parent company abroad. The directors of both companies being of opinion that it would be in the interest of the group of which the two companies formed part if the whole of the Scottish company's shares were held by the parent company, a scheme of arrangement was prepared, under which the parent company was to acquire the shares not already held by it, and each of the minority shareholders was to be paid a price for his holding substantially in excess of its market value. A petition for sanction of the scheme under sec. 206 was opposed on the ground that, being in essence an arrangement, not between the company and any class of its members, but between two groups of members, it did not fall within the ambit of the section.
Held that the scheme fell within what it is competent to achieve under sec. 206.
The Singer Manufacturing Company Limited, a company incorporated under the Companies Acts, 1862 to 1900, and having its registered office at Singer, Clydebank, presented a petition for sanction of a scheme of arrangement under section 206 of the Companies Act, 1948. Answers were lodged by Hermann Melchior Robinow, a shareholder.
The facts, so far as material to this report, are sufficiently explained in the first three paragraphs of the opinion of the Court. The main features of the proposed scheme of arrangement were set forth in the petition as follows:"(a) The 145, 670 ordinary shares of 1 each of the company in which Singer New York [the parent company] is not beneficially interested are to be acquired by Singer New York. (b) The holders of the said 145, 670 ordinary shares of 1 each will receive as consideration in respect of each ordinary share the sum of 85s. Provision is made for the payment of this sum, in the case of holders of such shares resident outside the sterling area and the holders of American depositary receipts representing ordinary shares of the company, in U.S. dollars, (c) The holders of the said 145, 670 ordinary shares of 1 will each have received a dividend, in...
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