Descriptif
This course introduces key concepts in the field of “Law & Finance”, which is concerned with the economic and financial impact of the law in the field of finance. It introduces key theoretical concepts before showing their concrete implications through case studies.
The course is split into 9 two-hour courses and 9 one-hour seminars (TD). In seminars, students will apply what they have learned during courses through presentations and debates on case studies. They will be graded based on their presentations and participation in class.
Objectifs pédagogiques
By completing this course, students considering a career in finance will acquire a strong competitive edge, both because of the relevance of Law & Finance for various investment strategies and because this field is not usually taught in business schools. Future business leaders will also find this course very valuable in understanding the legal mechanics underlying the management of (listed) companies.
effectifs minimal / maximal:
/30Diplôme(s) concerné(s)
- Programmes d'échange internationaux
- MScT-Data and Economics for Public Policy (DEPP)
- Titre d’Ingénieur diplômé de l’École polytechnique
- MScT-Economics, Data Analytics and Corporate Finance
Parcours de rattachement
Pour les étudiants du diplôme Titre d’Ingénieur diplômé de l’École polytechnique
Vos modalités d'acquisition :
To get credit for this course, students must make group presentations during TDs and submit a short written report (two to three pages) synthetizing their presentation beforehand. The overall grade is computed based on the quality of the group presentation (weight ½), the student’s oral participation in discussions about other groups’ presentations (weight ¼) and the student’s oral participation in class (weight ¼).
Pour les étudiants du diplôme MScT-Economics, Data Analytics and Corporate Finance
Vos modalités d'acquisition :
To get credit for this course, students must make group presentations during TDs and submit a short written report (two to three pages) synthetizing their presentation beforehand. The overall grade is computed based on the quality of the group presentation (weight ½), the student’s oral participation in discussions about other groups’ presentations (weight ¼) and the student’s oral participation in class (weight ¼).
Pour les étudiants du diplôme Programmes d'échange internationaux
Pour les étudiants du diplôme MScT-Data and Economics for Public Policy (DEPP)
Vos modalités d'acquisition :
To get credit for this course, students must make group presentations during TDs and submit a short written report (two to three pages) synthetizing their presentation beforehand. The overall grade is computed based on the quality of the group presentation (weight ½), the student’s oral participation in discussions about other groups’ presentations (weight ¼) and the student’s oral participation in class (weight ¼).
Programme détaillé
The topics covered and cases mentioned in the list below will be adjusted to fit the program followed in students’ other classes, and especially the course in Corporate Finance.
Class Topics covered
1. Introduction to Law & Finance
Case: made-up introductory case stressing relevant problematics - Objective pursued: efficiency and ESG considerations
- Key French legal institutions: courts, market authority, intermediaries, issuers’ and investors’ associations
- Basics of civil law: contractual freedom, default rules and mandatory rules
- Basics of corporate law: corporate forms, limited liability, specificities of listed companies
2. Corporate governance 1
Cases: Casino and Atos - Theory of the firm
- Fiduciary duties
- Moral hazard problems of the board and managers
- Controlling vs dispersed shareholders
- Shareholder democracy
3. Corporate governance 2
Case: Kaufman & Broad - Ethics vs efficiency in corporate governance
- Independent board members
- Remuneration of managers
4. Corporate governance 3
Case: TotalEnergies - Shareholder value maximization (Friedman doctrine) vs stakeholder approach (corporate purpose, codetermination)
- The pursuit of ESG considerations through corporate governance: theory and practice
- The shareholder short-termism debate
Takeovers 1: Bids by Non-Controlling Shareholders
Case: Veolia’s takeover on Suez - Theory of takeovers and maximization of firm value
- Conflicts of interests in the takeover context
- Shareholders’ vs board’s power, incl. poison pills
- Primer on risk arbitrage strategies
Takeovers 2: Bids by Controlling Shareholders
Case: EDF’s takeover by the French State - French takeover process
- Mandatory takeover bids
- Mechanics of minority shareholders’ expropriation
- Independent appraisal
ESG
Case: to be confirmed - ESG requirements bearing on corporations and investors
- Self-regulation
- Responsible investment in practice
Restructuring
Case: Casino - Objectives pursued by restructuring law
- Concepts of balance-sheet and cash-flow insolvency
- Key problems solved by restructuring law: creditors’ coordination, control, valuation
- Tools to solve these problems: stay of collective proceedings, creditors’ bargaining, fiduciary duties
- Merits and pitfalls of French restructuring law in addressing these problems
Competition
Case: Illumina/Grail - Relevant considerations in M&A transactions
- Perfect competition
- Cartel theory
- Abuse of dominance/monopolization
