''Pari passu'' is a

Latin Latin (, or , ) is a classical language belonging to the Italic languages, 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 ...

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 Singular may refer to: * Singular, the grammatical number that denotes a unit quantity, as opposed to the plural and other forms * Singular homology * SINGULAR, an open source Computer Algebra System (CAS) * Singular or sounder, a group of boar ...

masculine Masculinity (also called manhood or manliness) is a set of attributes, behaviors, and roles associated with men and boys. Masculinity can be theoretically understood as socially constructed, and there is also evidence that some behaviors ...

(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 Eng ...

, "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 ''Black's Law Dictionary'' is the most frequently used legal dictionary in the United States. Henry Campbell Black (1860–1927) was the author of the first two editions of the dictionary. History The first edition was published in 1891 by West ...

'' (8th ed., 2004) defines ''pari passu'' as "proportionally; at an equal pace; without preference".

Usage

In inheritance

In inheritance, a ''pari passu'' (''

per capita ''Per capita'' is a Latin phrase literally meaning "by heads" or "for each head", and idiomatically used to mean "per person". The term is used in a wide variety of social sciences and statistical research contexts, including government statistic ...

'') distribution can be distinguished from a '' per stirpes'' (by family branch) distribution. For example, suppose a

testator A testator () is a person who has written and executed a last will and testament that is in effect at the time of their death. It is any "person who makes a will."Gordon Brown, ''Administration of Wills, Trusts, and Estates'', 3d ed. (2003), p. 556 ...

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 In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that ...

area and in

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debto ...

proceedings, where

creditors A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...

are said to be paid ''pari passu'', or each creditor is paid ''

pro rata ''Pro rata'' is an adverb or adjective meaning in equal portions or in proportion. The term is used in many legal and economic contexts. The hyphenated spelling ''pro-rata'' for the adjective form is common, as recommended for adjectives by some E ...

'' 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 union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...

, as the result of the

Greek government-debt crisis Greece faced a sovereign debt crisis in the aftermath of the financial crisis of 2007–2008. Widely known in the country as The Crisis ( Greek: Η Κρίση), it reached the populace as a series of sudden reforms and austerity measures that ...

, 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 glob ...

, 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