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. Consequently, the decision had potentially far-reaching implications for creditors of Australian public companies. To read the full alert, please click here.