Corporate Finance

Level: 
Master's
Course Status: 
Elective
CEU credits: 
1
ECTS credits: 
2
Module: 
IV
Academic year: 
2010/2011
Start and end dates: 
10 Jan 2011 - 17 Feb 2011
Co-hosting Unit(s) [if applicable]: 
Department of Legal Studies
Instructor(s): 
Tibor Tajti

The recent global financial crisis has clearly highlighted the fundamental role financing plays in the life of businesses in developed and emerging economies alike. It is also commonly known that the leading economies of our times are the systems with the largest corporate sectors and hence it is justified to conclude that a strong corporate sector is the token of the strength of the economy. Yet strong corporate sectors cannot develop, or even exist, without readily exploitable avenues to capital and a legal environment that is friendly to the needs and expectations of both, the providers and users of capital.

The course will focus on the many roles law is entrusted with in respect of these aims and goals from a comparative perspective starting from the repercussions of the differences in the legal capital rules (common law v. civilian systems), payment of dividends, stock redemptions, basic features of and key concerns connected to common versus preferred shares as well as convertible bonds, hedging risks (derivatives), shareholder agreements, as well as insight into the law of mergers & acquisitions and takeovers.

Albeit the problems faced by lawyers in developed systems may seem to be different than the ones troubling their colleagues from emerging markets, the number of common problems has drastically increased in our globalized world – irrespective of the different needs. While developed countries are doing everything to prevent the collapse, or the emergence of anything pathological in the life of corporations, emerging markets are still in the process of forging the legal tools that could jump-start their local corporate sectors, what is a challenging task given that in the latter the exact nature of more complex financing methods (e.g., preferential shares or convertible bonds) is still unclear and untested in courts. The resulting legal vacuum is a serious problem not just because unpredictability hinders development but increasingly because the days when one could have safely ignored these types of problems are over. Suffice to mention the peculiar field of takeovers, which has already arrived not just to Western but also to Central and Eastern Europe (e.g., the takeover attempt targeting the Hungarian national oil & gas company “MOL” by its Austrian counterpart “ÖMV” in 2008) and is spreading beyond.

            The material covered is complimentary especially with the following courses offered by LEGS IBL: capital markets and securities regulation, comparative secured transactions law, the legal aspects of corporate governance and accounting for lawyers. Students specializing in corporate law and advanced contracts may find the course useful as well.