Today, Pari passu is a topic that generates great interest and participation in society. Since its emergence, Pari passu has been the subject of debate and discussion in different areas, from politics to science. Over time, Pari passu has evolved and adapted to the changes of the modern world, impacting people's daily lives. In this article, we will explore in depth the different aspects and perspectives related to Pari passu, analyzing its influence on society and its relevance in the current context.
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Pari passu is a Latin phrase that literally means "with an equal step" or "on equal footing". It is sometimes translated as "ranking equally", "hand-in-hand", "with equal force", or "moving together", and by extension, "fairly", "without partiality".
This term is commonly used in law. Black's Law Dictionary (8th ed., 2004) defines pari passu as "proportionally; at an equal pace; without preference".
In inheritance, a pari passu (per capita) distribution can be distinguished from a per stirpes (by family branch) distribution.
For example, suppose a testator had two children A and B. A has two children, and B has three.
This term is also often used in the lending area and in bankruptcy proceedings, where creditors are said to be paid pari passu, or each creditor is paid pro rata in accordance with the amount of his claim. Here its meaning is "equally and without preference". There have been cases where decisions were based on different interpretations of the term.
In the European Union, as the result of the Greek government-debt crisis, a retroactive collective action clause passed by the Greek government with the support of the ECB and IMF, enabled the debtor (who also controlled the courts) to impose a 70% loss on the creditors, more than 75% of whom had voted in favour of the cut. In this case, pari passu means that all private-sector investors are equally treated.
Ranking equally, meaning literally 'with equal step'.