CORPORATIONS - INSOLVENCY - STATUTES GIVING PRIORITY TO WAGE CLAIMS

Authors

Abstract

Statutes giving liens or preferences to wage claims upon the insolvency of corporations are found among the laws of many states. In reference to the priority established, these statutes can be divided into three classes: those specifically stating that the lien or preference created shall be prior to all other claims not secured by specific liens, those specifically stating that wage claims shall be superior to all other claims upon the property of the corporation, including mortgages, and those making wage claims a lien or preferred debt to be paid "before any other debt or debts." Under this last type of statute, which makes no mention of secured creditors, the question is immediately raised as to the priority between wage claims and claims of secured creditors; and the Delaware court, in applying such a statute, held that wage claims were to be preferred only to the claims of general creditors, not mortgagees or judgment lien holders. The decision turned upon the meaning of the word "assets" which was construed as the interest of the corporation in its property in excess of incumbrances thereon.

Recommended Citation

CORPORATIONS - INSOLVENCY - STATUTES GIVING PRIORITY TO WAGE CLAIMS, 30 Mich. L. Rev. 942 (1932).
Available at: https://repository.law.umich.edu/mlr/vol30/iss6/9