Chief Justice Anne Ferguson

The High Court of Australia has resolved a nearly 40-year old question of whether employees of a failed company established as trustee of a trading trust have priority over ordinary unsecured creditors.

The High Court has granted special leave to mortgage aggregator Connective in a dispute between the firm’s founder and major shareholders over a transfer of one-third of the company’s shares, in a case that could clarify whether litigation should be considered a prohibited form of financial assistance under the Corporations Act.