Myzer v. Emark Corporation
California Court of Appeal
53 Cal. Rptr. 2d 60 (1996)
Financially struggling Emark Corporation (Emark) (defendant) had given security interests to its attorneys, a director, and its CFO to secure over $1 million in debts; when Emark later agreed to sell to Sorrento, it withheld all employee paychecks, promising payment at closing, but other creditors ultimately offered employees only a partial percentage of their wages given insufficient sale proceeds to cover every claim. Myzer (plaintiff) and other employees sued to recover their unpaid wages and benefits, arguing California law gave their wage claims priority over Emark's attorneys' and officers' secured interests.
Whether statutory liens can have priority over other previously perfected security interests under the terms of the creating statute.