James is a Partner and Head of the Dispute Resolution team and primarily handles commercial…View Profile View all
In what may become something of the past post-Brexit, the Bradford based corporate and litigation teams of Schofield Sweeney have acted for a client in a cross-border merger between English and EU based companies under the Companies (Cross-Border Mergers) Regulations 2007.
The EU company, which was the principal shareholder in a number of English companies, is itself a wholly owned subsidiary of the English company. The purpose of the merger was to simplify the group structure. The merger was one by absorption, in which the English parent company swallowed the EU company whole, assuming all its assets and liabilities with the EU company ceasing to exist.
Working closely with the client’s Leeds based accountants and EU based lawyers, the Schofield Sweeney corporate team advised the English company upon the whole process under the Regulations and has settled the documents including the necessary report by directors to shareholders and the merger proposal which sets out the basis of the transaction.
Schofield Sweeney’s litigation team has handled the various applications to the Chancery Division of the High Court. The first application was for an order under the Regulations allowing the company to call a meeting of shareholders to consider and approve the merger proposal. That application came before H H Judge Davis- White QC sitting as a Judge of the High Court at Leeds and the order was granted by him.
Following the meeting of members, a second application was made by which the Court was asked to issue a certificate confirming that the company had taken all the required pre-merger steps. After that certificate was granted the English and EU companies jointly instructed Schofield Sweeney to make a further Part 8 claim for an order giving final approval for the merger to take place.
That application also came before HH Judge Davis-White. In making the order the judge made the point that he was not acting as merely a rubber stamp and had to consider the merger and its effects before exercising his discretion. He said that it was particularly the case, where, as here, the EU merger approval process was notarial based and was not overseen by the court.
The order having been made by the Court the merger took effect 21 days later. At that point the assets and liabilities of the EU company passed to the English company and the EU company ceased to exist.