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Pari Passu - Explained

What is Pari Passu?

Written by Jason Gordon

Updated at April 7th, 2023

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What is Pari-passu?

The literal meaning of pari-passu is "equal footing". It is a Latin phrase depicting situations in which the management of two or more creditors, assets, obligations, or securities is done without preferring anyone over the other. 

Pari-passu is a financial term referring to bonds, credits or classes of shares having equal payment rights or seniority. 

Trusts and wills can assign a distribution in pari-passu, in which all of the named entities equally share the assets.

Pari-passu may govern particular clauses within a number of financial vehicles, for example, bonds and debts. 

Back To: COMMERCIAL LAW: CONTRACTS, PAYMENTS, SECURITY INTERESTS, & BANKRUPTCY

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pari passu equal footing

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