Tuesday, 25 September 2012
Lecture 1 post hoc notes - Legal Aspects of Corporate Finance
Lecture 1: Legal Aspects of Corporate Finance Guest instructors: Professor Edmond Curtin and PhD Candidate Rezarte Vukatana I walked in a few minutes late with a bundle of papers and just started talking about THEORY as if it were the most natural thing in the world. I told them about a Russian table tennis star whose training regime included 6 hours of chalk and blackboard theory everyday. But the main point came from Hohfeld's definition of theory: "A theory is not even a theory unless it can be used by practitioners in their practice." I don't think I introduced myself but I did introduce Edmond and later Rezi. I mentioned a few themes: (1) WEAK EQUIVALENCE as the subtle equivalence of thoughts; (2) the UNITY OF SCIENCE CRITERION as the main ground for adjudicating theories-- a theory should be judged on how it helps us understand the unity of all knowledge of being; (3) sign, symbol (Edmond mentioned "signifier" pointing to the picture of the green man in the exit sign--everyone turned to look); (4) HOHFELD the undergrad chemistry student turned professor of Yale Law School who in early 20th century wrote only 6 articles and invented a periodic table for the law - 4 JURAL OPPOSITES and 4 JURAL CORRELATIVES with enormous theoretical effects; (5) CORBIN and WILLISTON who wrote encyclopediac tomes on contracts law, and how Corbin (a Hohfeldian student) took just one jural correlative, rights versus duties, and turned that tiny almost trivial legal distinction into 7 (or was it 9?) volumes of contract law; (6) And Where are Contracts anyway? shock horror to the civil law students ["on paper", "after the signature" they say] but no, says the common law jurisprudentem--CONTRACTS EXIST IN THE MIND [Edmond]; horror of horrors, is this the pure subjectivism, relativism and thus, total discretionary totalitarianism of the law?; (7) Why some questions within professional discourse make no sense ("What's north of the north pole, eh?"] and is there a way of understanding that transcends the bounds of discourse? Later, the astute Russian student answering a question about "material information" asked a rhetorical question about the distinguishment of various risks. Then I told a long story about Yuanjia, the Great Wun Chin master, who when cajoled by a Japanese martial artist that there are levels in the artistry of tea, replied, "The tea makes no such distinctions and is thoroughly enjoyed." Thankfully, Edmond gave us a brief rendition on some of the essential legal principles of DERIVATIVES--how they actually create MORE RISK and MORE ANXIETY, and never less. Rezi described part of her PhD dissertation research--theory of self-fulfilling prophecy a la Merton (?) and how this can be used to help explain the strange behaviours of very complex nodes of financial system called intermediated securities accounts. I passed around 3 LLM dissertations for the students' inspection, and gave them a homework assignment. I filed some prospectuses at LLMCFL2012@gmail.com [if you want the password, you need to contact me] with my notes, and asked the students to write 2,000 words on (1) the risks of the prospectus transaction (either Salvatore Ferragamo or Prada); and (2) determine whether and what parts of the selected prospectus would need to be changed under the Directive 2010/73 Nov 2010. They'll need to review about 600 to 800 pages and email me their work by 12noon Monday. Nice shock therapy.