Corporate Finance Law - Eva Micheler transcript

Corporate finance law is about the way in which companies raise money um and the legal rules that facilitate this. So, corporate finance is a a subject that uh finance scholars um think about and legal scholars and legal practitioners support this uh finance process in in that we examine and we make the rules that help companies to raise money. Um And um there are three ways in which companies fund their activity. Um one is debt.

So, this is borrowing. Um the other one is equity which is taking money from investors um and using it for the purposes of the company. Um it's called equity because the relationship between the company and the investors is one where the investors take more risk. Um and that has so they so for example, there's no interest payments, there's also no promise to pay return, but potentially there is a very significant upside if the company does really well um and makes a lot of money.

This may result in dividends and increases um in the value of the shares that have been issued to equity investors. Um and there's a third form of financing which is called retained earnings. So, this is money that the company has made in its activity and then uses to fund further activity. So, three forms of finance, debt, equity, and retained earnings and we will cover the law governing all of them. Um so, in the Michaelmas term, we will look at debt finance.

In uh, the Lent in the sorry, Hillary term, we are going to look at equity finance. And as part of that, we will cover retained earnings. The law of corporate finance is governed by legislation and case law. We will focus on the law in England and Wales and uh, on the legislation for the United Kingdom. Um, so legislation is, for example, the Companies Act 2006, the Insolvency Act uh, 1986. There's also the Financial Services and Markets Act.

Um, and as part of that legislation, the Financial Services and Markets Act contains um, retained rules from the European Union, which of course the United Kingdom has left. Um, and they have, however, been retained. The Financial Services uh, and Markets rules um, and are have been modified. Um, so we will look at the domestic UK regime, but of course, always with an eye on what's going on in Europe. Um, case law is the law of England and Wales.

Um, it pays a more significant role in relation to debt uh, than it does in relation to equity finance. Um, so this is a good course if you haven't done much case law before, but are interested in it. Um, and um, so what are the specific topics? Um, so we'll start with debt finance. And um, in the Michaelmas term, we're going to look at questions such as the mix of debt and equity. So, capital structure. We will look at contractual creditors, we will look at proprietary creditors, uh multiple lenders, um transfer how debt is transferred, and we will look at um also Islamic finance.

Um and then in the Hillary term, we're going to look at um equity and and in particular um how equity investments, how cap is so equity investments are recorded in the form of capital. So, we will look at um what legal capital is, and for that uh we will cover some accounting. Um and then there are uh rules that concern the raising of finance. Um so, these are uh rules on how uh of disclosure to investors and how the disclosure is enforced.

And then we have a session on private equity. Who's teaching on the course? Um I am the course convener. My name is Eva Michela. Um I have been at the London School of Economics previously as a professor, where I also taught the law of corporate finance. Um I joined Oxford very recently and very very excited about teaching the course. I'm supported by an eminent practitioner, Richard Salter KC. Um he will teach um he will lead on the debt section of the course and the debt sections of the course.

Um and there is also um a colleague, Anna Christie. She will teach the disclosure rules. Um and then there is another practitioner, Nilufer Karajy, who is um another practitioner. Uh Richard Salter is um a barrister, so he uh knows the litigation aspect. Nilufer is was a solicitor. Um, so she can um give us a window into the practice of solicitors. So, that's a um and then uh so so that's a In fact, we've got quite a dream team because we've got some solid scholars um and some solid practitioners working together um in introducing you to the subject.

Um and as customary, there's they're going to be lectures um and seminars. And and the lectures are held in one week, the seminars the following week so that you are able uh to do the reading before the seminar. Um and uh you'll get most out of those seminars if you do the reading and participate. There is also going to be, of course, tutorials. Um Four sets of those, two in Michaelmas and two in Hilary term. Um so, that's a very brief introduction to the law of corporate finance um and I look forward to seeing you in the course. >> [panting]