What is required for the Court approval of a Scheme of Arrangement?

A Scheme of Arrangement is a court-approved agreement between a company and its shareholders or creditors pertaining to the company's restructural proposals. For the Court to approve such a scheme, it is essential that a specified majority of those voting is supported. The requirement for 75% acceptance by value signifies that a substantial majority of the affected stakeholders must agree to the arrangement, thereby ensuring that the decision reflects the interests of a significant segment of the creditors or shareholders involved. This threshold is designed to protect minority interests while allowing the arrangement to proceed if it has gained substantial support.

Securing a simple majority of shareholders or needing 100% of shareholder votes would be too stringent and could jeopardize the feasibility of Schemes of Arrangement, as it would be challenging to achieve unanimous agreement. Similarly, regulatory approval, while potentially relevant in broader contexts, is not a mandated prerequisite for the court's approval of the scheme itself, as the focus primarily rests on the consent threshold established in law. Hence, the correct standard for Court approval hinges on obtaining at least 75% acceptance by value.