Sons of Gwalia and the High Court: Implications for Shareholders, Creditors and the Insolvency Framework

Insolvency Law Bulletin, Vol. 7, 2007

13 Pages Posted: 15 Apr 2007

See all articles by Anil Hargovan

Anil Hargovan

University of New South Wales

Jason Harris

The University of Sydney - Faculty of Law

Abstract

This article discusses the implications of the High Court of Australia's decision in Sons of Gwalia Ltd vs. Margaretic. That decision found that shareholders who claimed damages for misrepresentation under statutory misleading or deceptive conduct provisions were able to claim status as creditors in the company's insolvency. The claims of these shareholders were not postponed until all non-shareholder creditors had been fully satisfied. The decision raises numerous problems for the Australian corporate insolvenncy regime which we discuss.

Keywords: shareholders, subordination, insolvency, capacity as a member

JEL Classification: K22

Suggested Citation

Hargovan, Anil and Harris, Jason, Sons of Gwalia and the High Court: Implications for Shareholders, Creditors and the Insolvency Framework. Insolvency Law Bulletin, Vol. 7, 2007, Available at SSRN: https://ssrn.com/abstract=980246

Anil Hargovan

University of New South Wales ( email )

Kensington
High St
Sydney NSW 2052
Australia

Jason Harris (Contact Author)

The University of Sydney - Faculty of Law ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

HOME PAGE: http://https://sydney.edu.au/law/about/people/profiles/jason.harris.php

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