What is meant by the phrase Parri passu?
Pari-passu—Latin for “equal footing”—is a financing arrangement that gives multiple lenders equal claim to the assets used to secure a loan. If the borrower is unable to fulfil the payment terms, the assets can be sold, and each lender receives an equal share of the proceeds at the same time.
What is the effect of pari passu clause in the repayment of debenture?
With the presence of a pari passu clause, a debenture holder is assured of getting the repayment on pro rata basis between denture holders in case of insufficient funds or assets of the company.
What role does pari passu clause play in a sovereign debt restructuring?
According to the Court of Appeals, the pari passu clause protects against: (i) “the issuance of other superior debt (first sentence)”;4 and (ii) “the giving of priority to other payment obligations (second sentence)”.
What is the difference between pari passu and pro rata?
Pari Passu vs. A pro rata share simply means that each shareholder gets an equal proportion for every share of an investment that they own. In contrast, pari passu means that all obligations are of the same class and priority.
What is the synonym of pari passu?
pari passu, at an equal rateadverb. used in legal language. Synonyms: at an equal rate.
What is the difference between pro rata and pari passu?
What is pari passu charge with example?
An example of pari-passu occurs during bankruptcy proceedings: When the court reaches a verdict, the court regards all creditors equally, and the trustee will repay them the same fractional amount as other creditors, and at the same time.
Is pari passu the same as pro rata?
How do you pronounce pari passu?
pari passu Pronunciation. par·i pas·su.
What is the difference between pari passu and second charge?
The term that institution will have a pari passu charge over the borrowers assets means that the lenders are entitled to have equal right over the assets as per the agreed share. b). Second charge: A creditor holding second charge as mortgagee, is entitled to the proceeds after the first is met.
What is the difference between pari-passu charge and exclusive charge?
a) PariPassu charge – Under this, the charge is shared by more than one lender in the ratio of their outstanding amount. The prior consent of the existing charge holder(s) is required by the company. b) Exclusive charge – The security under the exclusive charge is provided to a particular lender only.
What is first and second pari-passu charge?
The lender for whom charge over assets is first created is called the holder of “first charge”. Where a second loan is backed by the same assets on which a first charge already exists, the subsequent charge holder is called “second charge”.