Statutory Debt Subordination: An Appraisal of the North American Experience
Bibliographic record
Abstract
The High Court of Australia recently found that statutory subordination laws in Australia did not embody a principle of members come last. The decision in Sons of Gwalia raised questions about whether the current law represents a sound policy outcome, and specifically drew attention to competing models in the US and Canada. The government has now referred this question to the Corporations and Markets Advisory Committee to consider law reform. The purpose of this article is to examine the policy and legal position of the subordination of shareholder claims during insolvency in the United States and Canada and to examine what lessons may be learnt from that experience. A critical appraisal of the North American jurisprudence on the subordination of shareholder claims for damages arising out of misrepresentation inducing the acquisition or retention of shares may be of assistance in resolving the current difficulties experienced in Australian insolvency law. The authors argue that the US position of blanket subordination should not be adopted in Australia, and propose a different model of limited subordination that will encourage confidence in the equity markets without undermining creditor protections.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.012 | 0.011 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.002 | 0.005 |
| Science and technology studies | 0.016 | 0.014 |
| Scholarly communication | 0.007 | 0.004 |
| Open science | 0.002 | 0.006 |
| Research integrity | 0.005 | 0.009 |
| Insufficient payload (model declined to judge) | 0.003 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".