PhD student: Mrs E. De Block

Promotor: S. Voet

Duration: 1/9/2020 - 31/8/2024

Abstract:

A pledge of shares is frequently used as collateral in the context of lending. Despite recent regulatory reforms, it did not receive the attention it deserves and many questions remain unanswered. The legal rules are succinct and scattered in different areas of law, leaving a practitioner unable to see the forest for the trees. The financial crisis and its economic aftermath made lenders permanently look for new types of collateral. Due to its low threshold (easy constitution, low cost, ..), a pledge of shares came increasingly under the spotlight. Nevertheless there is no coherent and comprehensive theoretical framework to date. Because of the probable tidal wave of bankruptcies, caused among other things by the COVID‐19 pandemic, there is however an urgent need for such a framework. On the basis of a foundation study, this research aims to fill this gap. The focus will be on three aspects: (1) the ratio legis (and added value) of a pledge of shares and its juxtaposition vis‐à‐vis other security interests, (2) how a pledge of shares is constituted, on which legal bases, the applicable substantive law and the rights and obligations of the pledgee and pledgor and (3) the enforcement of a pledge of shares, with particular attention to the frequently used seizure of shares and the related problem of valuation of shares.