The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:
The primary function of office-holders in personal and corporate insolvency is to collect in the assets belonging to a company or individual and to distribute these to the company's or individual's creditors. Office-holders have various duties and powers in order to ensure that they do this. For more information, see the Roles, powers, duties and functions of an insolvency office-holder—overview under 'The office-holder'.
The office-holder must apply property collected for the payment of creditors following a set priority order. For full details on the order of payments, see Practice Note: Waterfall of payments—a comparative guide. These set out how claims rank against each other upon a formal insolvency, both personal and corporate.
Pari passu is a Latin phrase which when translated literally means 'with an equal step' or 'on equal footing'. For the purposes of insolvency it encompasses the principle of proportionality and is referred to when stating how creditors are to be treated as against each other. If they are ranked 'pari passu' then each creditor is paid equally and without preference to one another. If there is not enough money in a bankruptcy or corporate formal insolvency to pay creditors in full, they will be paid pro rata on a pari passu basis, so each will get a proportionate return. For example, all creditors may receive 50p for each pound owing to
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