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Email

nl334@cam.ac.uk

Education CV

 

  • Hogan Lovells Scholar, PhD Candidate, University of Cambridge (Sidney Sussex) 
  • Harvard Law School - University of Cambridge, Academic Exchange Scholar 
  • Max Planck Institute for Comparative and International Private Law (Hamburg) - University of Cambridge, Academic Exchange Scholar 
  • Master of Law (LL.M.), Faculty of Law, University of Cambridge (Clare Hall) 
  • Master of Law (LL.M.) studies (one academic year), College of Humanities & Social Sciences, American University of Armenia (AUA) 
  • Bachelor of Law (LL.B.), Faculty of Law, Yerevan State University (YSU) 
  • Diploma from the School of Advocates of The Republic of Armenia (Civil Law and Civil Procedure specialisation) 
  • Advocate of The Chamber of Advocates of The Republic of Armenia, Licence ID: 2416

AWARDS and SCHOLARSHIPS:

  • SLS Best Paper Prize Winner 2021, The Society of Legal Scholars for 'Orchestrating Finance with Material Adverse Changes' paper (https://www.law.cam.ac.uk/press/news/2021/11/narine-lalafaryan-wins-soci...)
  • Hogan Lovells PhD Studentship in English Private Law (full, merit-based) (Cambridge PhD)
  • Armenian Bar Association | Vicken I. Simonian Memorial Scholarship (merit-based) (Cambridge PhD)
  • Armenian International Women's Association Scholarship (merit-based) (Cambridge PhD)
  • MPl Hamburg - University of Cambridge, Scholarship (Cambridge PhD)
  • International Bar Association (London) | IBA Trust Scholarship | Legal Policy & Reseach Unit
  • Cambridge Commonwealth, European & International Trust (Cambridge LL.M.)
  • Luys Foundation Scholarship of The President of The Republic of Armenia (merit-based) (Cambridge LL.M.)
  • Pegasus Trust Scholarship of The Honourable Society of the Inner Temple (merit-based) (Cambridge LL.M.)
  • Clare Hall Scholarship, University of Cambridge (Cambridge LL.M.)
  • Hirair and Anna Hovnanian Foundation Scholarship (Cambridge LL.M.)
  • Armenian General Benevolent Union Scholarship (Cambridge LL.M.)
  • Soroptimist International of Europe Scholarship (Cambridge LL.M.)
  • AUA Scholarship for Academic Excellence (merit-based) (AUA LL.M.)
  • Vartkess Balian Award AUA LL.M. Nominee (AUA LL.M.)
  • Ministry of Science and Education of the Republic of Armenia Full Scholarship for Academic Excellence (merit-based) (YSU LL.B.)
  • Ministry of Science and Education of the Republic of Armenia Stipend for Academic Excellence (merit-based) (YSU LL.B.)

ACADEMIC and RESEARCH EXPERIENCE: 

  • European Commission (EU), Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA), Capital Markets Union, "Analysis of Individual and Collective Loan Enforcement Laws in the EU Member States" report (2019). Research Assistant to Dr Felix Steffek (University of Cambridge). Provision of legal research assistance and leximetric data coding. (https://ec.europa.eu/info/publications/191203-study-loan-enforcement-law...)
  • Research Assistant, Machine Learning Project, Cambridge Centre for Business Research (CBR), University of Cambridge (2021)
  • Graduate Teaching Assistant, LL.M. Corporate Finance Law (Debt Finance), (2019-2020), Faculty of Law, University of Cambridge
  • Company Law Supervisor, BA Tripos Law, (Part II), (2020-2021) (2019-2020), Sidney Sussex College, University of Cambridge
  • Graduate Teaching Assistant, LL.M. Corporate Finance Law (Debt Finance), (2018-2019), Faculty of Law, University of Cambridge
  • Law Admissions Interviewer (2020-2021), Newnham College, University of Cambridge
  • Guest Speaker for LL.M. corporate finance students, University College London (UCL), Faculty of Laws (2021)

PROFESSIONAL EXPERIENCE:

  • Legal Counsel, ZCMC CJSC/CRONIMET GRUPPE 
  • Legal Researcher (volunteer), International Bar Association, Legal Policy & Research Unit (LPRU) 
  • Pegasus Scholar/Lawyer, South Square chambers, The Honourable Society of Gray's Inn 
  • Pegasus Scholar/Lawyer, No5 Chambers (London), The Honourable Society of the Inner Temple 
  • Pegasus Scholar/Lawyer, 11KBW chambers, The Honourable Society of the Inner Temple 
  • Junior Associate, Harutiunian & Partners Law Firm LLC 

MEMBERSHIPS and BAR ADMISSION

  • Life Member, Clare Hall College, University of Cambridge
  • Member, The Society of Legal Scholars
  • Licensed Advocate of the Chamber of Advocates of the Republic of Armenia
  • Benjamin Franklin Fellow (Alumna) of the Benjamin Franklin Transatlantic Fellowship

GRANTS:

  • Youth in Charge Civic Engagement Seminar, Wake Forest University, North Carolina, Benjamin Franklin Transatlantic Fellowship
  • Young European Peers (Berlin, Germany), (Brussels, Belgium) Youth in Action Programme, The European Commission, European Union (joint grant with other co-founders)

OTHER EXPERIENCE:

  • Pegasus Scholar, The Honourable Society of the Inner Temple (Pegasus Trust founded by Lord Goff)
  • Co-founder, Organiser, Teacher, Young European Peers, Youth in Action Programme, The European Commission, European Union
  • Benjamin Franklin Scholar, Benjamin Franklin Transatlantic Fellowship, The United States Department of State (Wake Forest University)

 

Fields of research

  • Law and Finance
  • Corporate Finance
  • Debt Finance
  • International Corporate Transactions (Deals)
  • Law and Economics 
  • Comparative Corporate Law
  • International Financial Law
  • Game Theory

 

Uncertainty in Debt Finance: Reconceptualising Material Adverse Change Clauses

Summary

From a legal and economic perspective, the global financial crisis, terrorist attacks, wars, natural catastrophes, and COVID-19 all have one thing in common: they potentially count as “material adverse change” events. Such events are typically unpredictable and have severe consequences for the global economy. To help manage the fallout from such negative events, businesses in economically valuable and complex deals, such as corporate debt financing or mergers and acquisitions (“M&A”) deals, include special contractual risk allocation provisions, called Material Adverse Change/Effect (“MAC”) clauses.

Despite increasing popularity, vague drafting and the lack of case law have made the application and construction of MAC clauses extremely ambiguous and uncertain. The uncertainty affecting MAC clauses has been acknowledged by courts, scholars, practitioners, economists, and policymakers. The importance of addressing MAC clauses in debt finance is evident from the fact that the vast majority of high-profile debt financing deals attach great importance to MAC clauses. Destabilising events in the markets, including the COVID-19-driven crisis (aggravated by Brexit) especially emphasise the urgency. Events of this kind might force many despairing lenders and buyers in high-profile deals to attempt to rely on MAC clauses as a basis for renegotiating or calling off no-longer-profitable debt financing or M&A deals. The impact of abruptly terminating such deals, that are worth jointly trillions of dollars, will cost the global financial system a fortune, if not a “life”.

This thesis is the first to answer the question of whether MAC clauses are efficient in corporate debt financing agreements. This thesis proposes a novel “Theory of MAC Clauses in Debt Finance” that is based on solution-driven economic insights to explain the misunderstood and unrealised nature of MAC clauses in debt finance and emphasise their role in orchestrating financing deals and linked relationships (i.e., those beyond the immediate financing deal). By doing so this thesis reconceptualises MAC clauses in debt finance and challenges a common perception of loan financing contracts. It argues that loan financing contracts are meant to be breached: they are meant to be continued and not ended, but they are meant to be renegotiated (re-priced) due to the evolving nature of debt finance.

This thesis finds that MAC clauses in debt finance are efficient; they are a valuable creation of Anglo-American legal systems. Their efficiency, however, could be substantially improved based on the recommendations set forth in the thesis. This thesis concludes that a common understanding of the nature of loan financing has not always been accurate. This thesis argues that loan financing agreements are often meant to be breached. They are meant to be continued and not ended: they are meant to be renegotiated (re-priced) due to the evolving (dynamic) nature of debt finance. This thesis also provides recommendations for further advancing MAC clauses in debt finance and outlines new directions of research stemming from this thesis.

Methodology:

This thesis employs three different methods:

  • doctrinal,
  • inter-disciplinary law-and-economics, and
  • functional comparative.

The choice of these three different methods is predicated on the nature of the main research question of this thesis: whether MAC clauses are efficient in corporate debt financing agreements. To be able to provide a comprehensive answer to the main research question of this thesis, one needs to evaluate this question from three different angles. In addition, as part of the research undertaken for this thesis, several conversations were also held with practitioners: to check our insights and to be up-to-date with the important relevant developments in the legal practice.

Key Words: Material Adverse Change, Debt Finance, Law and Finance, Economic Analysis of Law, Information Asymmetry, Uncertainty, Pricing, Creditor Protection, Debt Governance, Debt Decoupling, Theory of MAC Clauses in Debt Finance, Reconceptualising MAC Clauses, Exogenous Risks, Endogenous Risks, Risk Diversification, Functional Inter-Jurisdictional Comparison, Knowledge of facts, Knowledge of risks, Unknown adverse events, Drop in the company’s value, Duration of the drop in the company’s value, English law, Delaware law, New York law.

 

Supervisors

Supervisor: Dr Felix Steffek

Advisers: Prof Louise Gullifer KC, Prof Marc Moore

Examiners

First-year examiners:

Prof Simon Deakin

Prof Marc Moore

Start Date

Oct 2018

End date

Sep 2021

Publications

 

Articles

"Orchestrating Finance with Material Adverse Changes (2021 SLS Best Paper Prize Winner)" Lalafaryan, N. (2022). Orchestrating finance with Material Adverse Changes? Legal Studies, 42(1), 1-22.

Citation:
Lalafaryan, N. (2022). Orchestrating finance with Material Adverse Changes? Legal Studies, 42(1), 1-22.
DOI:
https://www.doi.org/10.1017/lst.2022.6
Published: Mar 2022

"Material Adverse Change uncertainty: costing a fortune if not corporate lives " (2021), Journal of Corporate Law Studies, 21:1, 39-84

Citation:
(2021), Journal of Corporate Law Studies, 21:1, 39-84
DOI:
https://doi.org/10.1080/14735970.2020.1781484
Published: Mar 2021

Blog Posts

Conference Papers

"Orchestrating Finance with Material Adverse Changes " (The 2021 Society of Legal Scholars Annual Conference | Banking & Financial Services Law | Main Programme )

Conference:
The 2021 Society of Legal Scholars Annual Conference | Banking & Financial Services Law | Main Programme
Published: Forthcoming