Melbourne Law School - Theses
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ItemInteraction between commercial & legal aspects of project finance in Australasia( 1997)The project finance technique emerged as a result of legal principles evolving to meet commercial needs. Its value - enabling companies to fund projects on other than their own credit standing and to diversify risks associated with projects - has been proved by a remarkable string of major developments which were unlikely to have been undertaken without such a financing method. Over the years, the technique has been adapted to a range of applications and industries. One of its most recent uses has been in private sector development of public infrastructure projects. It is in this climate of continued need for project financing that this thesis seeks to examine its development to date, its strengths and its weaknesses, and to consider what changes, if any, are needed to ensure its continued usefulness in the future. The growing body of work known as 'economic analysis of law' is used as a key to understanding these issues and to suggest possible ways forward. Risk is identified as being central to the project financing process. Its identification, allocation and mitigation are the building blocks of the technique. Parties trade risks and contractual arrangements are put in place to give effect to these compacts. These contracts have often been creative, responding to the commercial requirements of the particular development and the parties involved. Novel processes have been devised to deal with cases of project or operator failure, providing self governing and self executing regimes for the developments. These self contained mechanisms are a response to the fact that court adjudication of disputes in these transactions is often inappropriate. The sophistication of these arrangements, however, has also resulted in significant transaction costs. Lengthy and complex documentation is characteristic in these financings. The costs begin at the outset of the transaction in the time and money involved in negotiating documentation and, on an on-going basis, arise through the significant reporting burden usually imposed on borrowers and the restrictive provisions which require continual lender involvement in project decision making. The lengthy, detailed documentation provides the project management regime as it usually stipulates in great detail how the project is to be operated and what the borrower can and cannot do. However, the very long terms of these financings (at times 17 or 18 years), mean that parties are unlikely to succeed in anticipating and dealing comprehensively with every imaginable contingency. The use of such lengthy, detailed documentation will, therefore, be reviewed and a theoretical analysis presented of why project participants have adopted this strategy. This thesis also recommends alternative strategies for structuring the project finance relationship. The optimal solution for any project should still be determined on the specific circumstances on the case and is likely to combine elements of the current approach with some of the proposals suggested.
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ItemDirectors' duties, creditors' rights and shareholder intervention( 1991)The time is ripe for a critical analysis of the scope of directors' duties, the role of shareholder intervention and the ability of company creditors to obtain remedies. Company directors are now the object of intense public scrutiny. Popular sentiment, law reform bodies and the judiciary all appear to favour expanding the duties owed by directors and increasing the ability of minority shareholders and company creditors to complain of breaches. Before any reforms are introduced, the existing law needs to be reassessed: it may already be capable of meeting the proposed demands. This thesis puts forward the view that no change to the existing law is necessary. It proposes a new analysis of the existing law to provide a logical legal framework for determining standing to sue, appropriate remedies and the effectiveness of shareholder intervention. This analysis suggests that shareholders and company creditors have greater rights than was previously thought: for this reason the existing law is adequate to meet the increased demands proposed. The absence of an adequate analytical framework in this area of the law is most evident in the debates concerning both directors' duties to creditors and the role of directors in company takeovers. The former are analyzed in detail in this thesis, but the same analysis is equally applicable to the latter. The analytical framework proposed to remedy this deficiency requires that a simple but fundamental distinction be drawn between directors' duties to act for proper purposes and directors' duties of loyalty to the company. The consequences of such a simple distinction are far-reaching: different remedies, different possibilities for shareholder intervention and different classes of possible complainants are appropriate for breaches of the different duties. It is these consequences which give the proposed analytical framework its value.