In 1992, Emark Corporation (defendant) experienced financial difficulties and gave security interests to secure debts owed to the corporation’s attorneys, director, and chief financial officer for over $1 million. In 1993, Emark agreed to sell to Sorrento. The paychecks of all employees were withheld and employees were told they would be paid as part of the closing of the sale. However, Emark’s other creditors later offered the employees only a percentage of the wages due because there were insufficient funds to pay all claims. Myzer (plaintiff), an Emark employee, and other employees filed a complaint to recover wages and benefits. The employees alleged that California law gave them priority over the secured interests of Emark’s attorneys and corporate officers.