PARI PASSU

Pari Passu is a Latin word that simply means the equal rate.  Pari Passu requires all parties to be treated the same. The Pari Passu is used to venture capital. Pari passu describes the distributions to the creditors if they are ready to take the prorate shares of the assets of the debtor.  When describing both securities and debts which have the equal claim, a new issue of the security is issued Pari passu. Common shares in the company are Pari Passu. This means that common shares in the company are ranked equally. There no set of the common shares which have the higher claim to the dividend and assets. Common shares and preferred shares are very different, though shares in each class are Pari Passu. The principle of Pari Passu means unsecured creditors must equally share the available assets of the company. The Pari Passu is the fundamental principle of the insolvency law.

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