The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:
The primary function of office-holders in corporate or personal insolvency is usually to collect in the assets belonging to a company or individual, to realise them and to distribute these to the company's or individual's creditors in accordance with the statutory waterfall (for further information, see Practice Note: Waterfall of payments—a comparative guide). 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.
Pari passu is a Latin phrase meaning '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 in the same class is paid equally and without preference to one another. If there is not enough money in an 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 unsecured creditors (ie those creditors in the same class) may receive 10p for each pound owing to them.
The pari passu rule is set out in
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