The difference between debt and equity

This is an interesting ruling to say the least. The SMH reports the ruling in favour of a shareholder to be classed as a creditor.
This is plain wrong.

Investing in a company makes you a shareholder (you own a share of the company). A part OWNER in the company.
When a company appoints an administrator, it is saying the current owners are no longer capable of running the company. Normally the creditors appoint administrators.

Being a creditor of a company is different. You have either lent money to the company or you have sold services or goods to the company. Both actions are essentially the same thing... In lending money to the company, you have transfered money to the company so they can go purchase goods and services.
As a creditor you have performed one part of a transaction. As a creditor the company recognises that the company owes you payment in the future, in the form of money.

This is the fundamental difference between equity and debt.
Equity = share in company profits either through dividends or share price increase
Debt/Creditor = owed money (future goods and services)

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