Ratner's Service Centre encountered financial set backs over a period of time,and eventually found itself insolvent.Among its creditors were the first and second mortgagees of the land and building which Ratner's owned,trade creditors,employees who had not been paid wages,and the municipality,for arrears of property taxes.Ratner's decides not to make a proposal to its creditors.Under the Bankruptcy and Insolvency Act,employees have first priority claims against the assets of the bankrupt firm.

Question

Quizplus · Accepted Answer

Under the Bankruptcy and Insolvency Act, secured creditors, such as mortgagees, have priority over unsecured creditors, including employees. However, employees do have a priority claim for unpaid wages up to a certain limit, but they are not the first priority overall.

Ratner's Service Centre Encountered Financial Set Backs Over a Period