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Corporate Finance Law in the UK and EU Dan Prentice & Arad Reisberg, eds. (Oxford: Oxford University Press, 2011) Hi + 550 pp. C$283.50
Corporate finance represents one of the main and most challenging topics in the context of corporate law. It is a multidimensional subject since it entails dealing with equity and debt financing alike. Further, the rapid development in capital markets and the link between these markets on the global level have added further complication to this multifaceted topic. Each one of these mentioned elements has a wide range of legal issues that is associated with it.
Corporate Finance Law in the UK and EU corresponds to the most important and topical issues in the context of corporate finance over 18 chapters, divided into three main parts: Equity Financing and Capital Market Finance, Debt Financing and Taxation, and European Law and Policy. Each part of these three deals extensively with the most related topics within the UK and EU legal and regulatory framework. The following review will mainly focus on Part I and ?? of the book while it will briefly mention the key issues that Part ? examines with regard to corporate debt financing.
The main theme carried through the chapters in Part I is the legal protection offered to investors who are dealing with a company's shares. Chapters 1 and 2 consider protective measures, including the prohibition of financial assistance and legal capital maintenance rules. Chapter 3 evaluates the effectiveness of one of the mechanisms introduced by the Companies Act 2006} scheme of arrangements, which allow creditors or members to rearrange their rights.
Chapter 1 examines the restrictions on financial assistance that Companies Act 2006 has installed. The chapter argues that the restrictions seem to have increased regarding public companies but were quite limited in relation to private companies. It further highlights the court's role in managing the use of these restrictions by setting up some limits to their application. Chapter 1 underlines the EU attempts in Directive 2006/68/EC to relax the prohibition on financial assistance which has not been adopted by the UK in Companies Act 2006, as the suggested alternative procedures are of little help to public companies. The chapter assesses the need and effectiveness of the prohibition...