Policy Issues Raised By the Subordination of Shareholder Claims

Insolvency Law Bulletin, Vol. 7, No. 1, 2006

10 Pages Posted: 12 Feb 2007

See all articles by Anil Hargovan

Anil Hargovan

University of New South Wales

Jason Harris

The University of Sydney Law School

Abstract

This paper provides a discussion of some of the policy issues raised by the Federal Court of Australia's decision in Sons of Gwalia v Margaretic. That decision refused to subordinate the claim by a shareholder who alleged that they were induced to purchase shares on the secondary market by misrepresentations from the company's management. We compare the subordination of shareholder claims in Australia, England, Canada and the United States in an attempt to suggest future law reform in Australia.

Keywords: Subordination, shareholder claims, Gwalia, Australian securities fraud

JEL Classification: K22, K29

Suggested Citation

Hargovan, Anil and Harris, Jason, Policy Issues Raised By the Subordination of Shareholder Claims. Available at SSRN: https://ssrn.com/abstract=962088

Anil Hargovan

University of New South Wales ( email )

Kensington
High St
Sydney NSW 2052
Australia

Jason Harris (Contact Author)

The University of Sydney Law School ( 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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