Insider Guarantees in Corporate Finance / Aart Jonkers.

Format:

Book

Author/Creator:

Jonkers, A. L., 1987- author.

Series:

European and International Insolvency Law Studies

European and International Insolvency Law Studies ; v.5

Language:

English

Subjects (All):

Corporations--Finance.

Corporations.

Physical Description:

1 online resource (390 pages)

Edition:

First edition.

Place of Publication:

Den Haag, Netherlands : Eleven International Publishing, [2020]

Summary:

Insider guarantees play a crucial role in corporate finance.In small and medium companies shareholders frequently guarantee business debts towards a professional creditor, often the bank.In corporate groups, group companies often guarantee each other's debts towards a lender.The economic dynamics involved are however poorly understood.

Contents:

Intro

Table of Contents

Introduction

Chapter 1 Comparative law &amp

economics

1 Introduction

2 Comparative law &amp

2.1 Functionalist comparison and its limits

2.2 The economic perspective on law

2.3 Using law and economics to define a problem and to measure the effects of rules

2.4 Using law and economics to evaluate results of the comparison

2.5 Influence of comparative law on law and economics

2.6 Limits of the approach

2.7 Summary

3 Economics: Micro-Economics With Focus on Opportunism

3.1 Transaction Cost Economics and bounded rationality

3.2 Trust and opportunism

3.3 The difficulty of policing opportunism with contract law rules

3.4 Transaction Cost Economics and the guarantee relationship

3.5 Summary

4 Conclusion

Chapter 2 The beneficial economic function of the guarantee relationship in corporate finance

2 Signaling

2.1 Adverse selection

2.2 Credit rationing

2.3 Types of guarantees suitable for signaling

2.4 Summary

3 Reducing debtor misbehavior

3.1 Guarantees limiting opportunistic default in general

3.2 Opportunistic use of limited liability and the role of guarantees

3.2.1 Overinvestment

3.2.2 Inadequate effort supply

3.2.3 Asset shifting/asset stripping

3.3 The function of other devices

3.4 Summary

4 Specialization in monitoring

5 Specialization in risk-bearing

6 Conclusion

Chapter 3 Opportunistic use of the guarantee relationship in corporate finance

2 Opportunism towards parties inside the guarantee relationship

2.1 Opportunism towards a weak guarantor

2.2 Opportunism towards the debtor

2.3 Summary

3 Opportunism towards outsiders to the guarantee relationship

3.1 Ex ante opportunism: Opaque priority structures

3.1.1 Opaque seniority through guarantees.

3.1.2 Justification for selective perforation of limited liability?

3.1.3 Justification for priority analogous to real security rights?

3.1.4 Justification for strong-form double proof and deficiency double proof?

3.1.5 The shareholder guarantee as an indirect shareholder loan

3.1.6 Summary

3.2 Ex post opportunism: covert insider dealing

3.2.1 Preferences in the twilight zone

3.2.2 Subtler forms of opportunism: feeding the lien, inefficient investment attitudes, inefficient bankruptcy filing

3.2.3 The inefficiency of creditor control through guarantees

3.2.4 Control through guarantees is more problematic than through real security rights

3.2.5 Specific dynamics in a reorganization procedure

3.2.6 Summary

Chapter 4 Dutch law on opportunism with the guarantee relationship

2 Introduction to types of guarantees in Dutch law

2.1 Suretyship ('borgtocht')

2.1.1 The relationship between creditor-guarantor

2.1.2 The relationship between guarantor-principal debtor

2.1.3 Co-suretyship, contribution

2.2 Co-debtorship for security purposes ('contractuele hoofdelijkheid')

2.3 Independent guarantee ('onafhankelijke garantie')

2.4 Group guarantees for accounting purposes ('403-verklaring')

3 Dutch law on opportunism towards parties inside the guarantee relationship

3.1 Definition of consumer suretyship

3.2 Consumer protection: duty to warn the surety

3.3 Protection of consumer suretyship through mandatory suretyship law

3.4 Protection of consumer guarantors other than sureties

3.5 Protection of weak parties other than consumers

3.6 Protection of legal persons standing surety

3.7 The spouse

3.8 Protection through bankruptcy law

3.9 Summary

4 Dutch law on opportunism towards parties outside the guarantee relationship.

4.1 Regulatory approach to opaque priority structures (ex ante opportunism)

4.1.1 Annulling limited liability

4.1.2 Avoidance of the guarantee itself

4.1.3 Subordinating loans guaranteed by shareholders

4.1.4 Disallowing double proof

4.2 Regulatory approaches to covert insider dealing (ex post opportunism)

4.2.1 Avoidance of payments on guaranteed loans

4.2.2 Possibilities for redress outside preference law

4.2.3 Shareholder liability for unlawful withdrawals outside preference law

4.2.4 Director liability for insider preferences

4.2.5 Lender tort liability for insider preferences

4.2.6 Specific dynamics in reorganization

4.2.7 Summary of Dutch law on external relations

5 Conclusion

Chapter 5 US law on opportunism with the guarantee relationship

2 Introduction to types of guarantees in US law

2.1 Guarantees under the Restatement of Suretyship

2.1.1 The relationship between creditor and surety

2.1.2 The relationship between surety-principal debtor

2.1.3 Co-suretyship and sub-suretyship, contribution

2.2 Joint and several contractual liability

2.3 Independent guarantee

3 US law on opportunism towards parties inside the guarantee relationship

3.1 Specific consumer guarantor protection

3.2 Protection of guarantors that are legal persons

3.3 Protection based on general contract law between creditor and guarantor

3.3.1 Consideration

3.3.2 Statute of Frauds

3.3.3 Construction

3.4 Protection through bankruptcy law

3.5 Summary of US law on the internal relations

4 US law on opportunism towards parties outside the guarantee relationship

4.1 Regulatory approach to opaque priority structures (ex ante opportunism)

4.1.3 Subordination of claims guaranteed by shareholders.

4.1.4 Disallowing double proof

4.2.2 Director liability for insider preferences

4.2.3 Lender liability

4.2.4 Bad boy guarantees

4.2.5 Fresh start laws

4.3 Summary of US law on external relations

Chapter 6 German law on opportunism with the guarantee relationship

2 Introduction to types of guarantees in German law

2.1 The archetype of personal security: suretyship ('Bürgschaft')

2.2 Co-debtorship ('Schuldbeitritt') and Patronatserklärung

2.4 Group guarantees for accounting purposes

3 German law on opportunism towards parties inside the guarantee relationship

3.1 Protection against immoral suretyship

3.1.1 Development of case law on immoral suretyship

3.1.2 Current state of the case law on the protection of weak sureties

3.1.3 Summary

3.2 Protection through the written form requirement

3.3 Consumer credit law

3.4 Doorstep sales law

3.5 Protection through unfair standard terms control

3.6 Protection of the spouse

3.7 Protection through bankruptcy law

3.8 Summary of German law on opportunism with the internal relationship

4 German law on opportunism towards parties outside the guarantee relationship

4.1 Regulatory approaches to opaque priority structures (ex ante opportunism)

4.1.2 Not upholding the guarantee itself

4.1.3 Subordinating claims guaranteed by shareholders

4.1.4 Disallowing double proof.

4.1.5 Summary of German law on opaque priority structures with guarantees

4.2.2 Shareholder liability for unlawful withdrawals outside preference law

4.2.3 Director liability for insider preferences

4.2.4 Lender liability as de facto director

4.2.5 Specific dynamics in reorganization

4.2.6 Summary of German law on covert insider dealing

Chapter 7 Comparison &amp

synthesis

2 The beneficial function of guarantees in corporate finance

3 Opportunism towards parties inside the guarantee relationship

3.1 The problems with opportunism towards parties inside the guarantee relationship

3.2 The approaches of US, German and Dutch law to opportunism inside the guarantee relationship

3.3 Conclusions on the optimal approach to opportunism inside the guarantee relationship

4 Opportunism towards parties outside the guarantee relationship: (1) opaque priority structures

4.1 The problems with opaque priority structures

4.2 The approaches of US, German and Dutch law to opaque priority structures

4.2.1 Annulling limited liability ('tearing down the walls')

4.2.2 Avoiding the piercing guarantees ('enforcing the walls')

4.2.3 Limiting double proof

4.2.4 Indirectly and partially subordinating shareholderguaranteed claims

4.3 Conclusions on the optimal regulatory approach to opaque priority structures

5 Opportunism towards parties outside the guarantee relationship: (2) covert insider dealing

5.1 The problems with covert insider dealing

5.2 Approaches of US, German and Dutch law to covert insider dealing through guarantees

5.2.1 Transaction avoidance

5.2.2 Director liability

5.2.3 Shareholder liability.

5.2.4 Recourse to the guaranteed lender.

Notes:

Description based on publisher supplied metadata and other sources.

Description based on print version record.

Other Format:

Print version: Jonkers, Aart Insider Guarantees in Corporate Finance

ISBN:

94-6094-852-9

OCLC:

1378391706