CORPORATIONS-INSOLVENCY-CORPORATE OFFICERS AS PREFERRED WAGE CLAIMANTS

Authors

E. C.V. Greenwood, University of Michigan Law SchoolFollow

Abstract

A closed corporation, soon after its formation, executed an assignment for the benefit of creditors. One of the large creditors objected to a preferred wage claim allowed by the assignee to a vice-president and director of the assignor, the officer who had in fact been instrumental in executing the assignment. The claim was for wages amounting to two hundred fifty dollars for alleged manual work for the assignor prior to the assignment and was granted by the assignee on the theory that preferential treatment was authorized by the New York debtor and creditor statutes. The applicable statute reads as follows: "The wages or salaries actually owing to the employees of the assignor or assignors at the time of the execution of the assignment for services rendered within three months prior to the execution of the assignment, not exceeding three hundred dollars to each employee, shall be preferred before any other debt . . . Held, the director and vice-president was not an "employee" within the meaning of the New York debtor and creditor law so as to warrant preference as a wage earner. In re Macton Textile Processing Co., Inc., (N.Y. Sup. Ct. 1947) 72 N.Y.S. (2d) 553.

Recommended Citation

E. C. Greenwood, CORPORATIONS-INSOLVENCY-CORPORATE OFFICERS AS PREFERRED WAGE CLAIMANTS, 46 Mich. L. Rev. 679 (1948).
Available at: https://repository.law.umich.edu/mlr/vol46/iss5/11