First National Bank of Indiana v. Gabonay

SHEPARD, Chief Justice.

When an employer's business is suspended by creditors, employees who are owed wages have a limited preferred debt pursuant to Ind.Code § 22-2-10-1 (West 1981). The issue in this case is whether that preferred debt takes priority over a mortgage on real estate and a security interest in accounts receivable and other personal property. We hold that it does.

Plaintiffs were employees of Gratzol & Nicodemus Roofing and Sheet Metal Co., Inc. (Gratzol). First National Bank (Bank) held a mortgage on Gratzol's real estate and a security interest in the company's accounts…