''Pari passu'' is a

Latin Latin (, or , ) is a classical language belonging to the Italic branch of the Indo-European languages. Latin was originally a dialect spoken in the lower Tiber area (then known as Latium) around present-day Rome, but through the power ...

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".

Etymology

:* '' pari'' is the

ablative In grammar, the ablative case (pronounced ; sometimes abbreviated ) is a grammatical case for nouns, pronouns, and adjectives in the grammars of various languages; it is sometimes used to express motion away from something, among other uses. ...

singular masculine (since it must grammatically agree with ''passu'') of the

adjective In linguistics, an adjective ( abbreviated ) is a word that generally modifies a noun or noun phrase or describes its referent. Its semantic role is to change information given by the noun. Traditionally, adjectives were considered one of the ...

''par'', "equal". If it were

nominative In grammar, the nominative case ( abbreviated ), subjective case, straight case or upright case is one of the grammatical cases of a noun or other part of speech, which generally marks the subject of a verb or (in Latin and formal variants of ...

, "an equal step" it would be ''par passus''. :* '' passu'' is the

of the Latin noun ''passus'', "step". 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".

Usage

In inheritance

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. * If the testator leaves his or her entire estate to his or her grandchildren in equal shares ''pari passu'', each grandchild would inherit one fifth of the estate. * In contrast, if the estate was left to the grandchildren ''per stirpes'' (by family branch), the children of A would share one half of the estate equally between the two of them, and the children of B would share one half of the estate equally amongst the three of them.

In lending, bankruptcy and default

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 The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been ...

, 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 The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...

, 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.

Etymology

Usage

In inheritance

In lending, bankruptcy and default

See also

References

Notes

Further reading