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Australian Insolvency Law: Getting its Priorities Straight

The decision of the High Court of Australia in Sons of Gwalia v Margaretic (2007) 231 C.L.R. 160 (“Sons of Gwalia”) needs no introduction. The high-profile and controversial decision of Australia’s highest Court altered the principle of subordination of shareholder claims to allow the claims of a shareholder in respect of losses caused by misleading and deceptive conduct of the company to rank pari passu with the claims of general unsecured creditors.