Earl has been employed by Flash Co, for the past 20 years. During that time he has also invested in the company in the form of shares and debentures. Earl owns 5,000 ordinary shares in Flash Co. The shares are of $1 nominal value and are paid up to the extent of 75%. The debentures, to the value of $5,000, are secured by a fixed charge against the land on which Flash Co’s factory is built. In April it was announced that Flash Co was going into immediate insolvent liquidation, owing considerable amounts of money to trade creditors (trade payables). As a result of the suddenness of the decision to liquidate the company, none of the employees received their last month’s wages. In Earl’s case this amounted to $2,000. Required: Advise Earl as to his rights and liabilities in relation to Flash Co in regard to:
(a) his unpaid wages; (3 marks)