ABSTRACT
We know that Lord Justice Snowden’s landmark judgment for a unanimous Court of Appeal of England and Wales in Adler (2024) emphasised the presumptive importance of the pari passu principle. But what does this principle amount to? What does it require?
The term ‘pari passu’ is used in judicial and textbook writings to refer to one or other of no fewer than four different principles. Regrettably, this is a reliable recipe for confusion. Three of these principles relate to distribution of value from the insolvency estate but are very different from each other, while the fourth is a principle of conservation rather than distribution.
This new paper, published in (2024) 39(7) Butterworths Journal of International Banking and Financial Law 443-449, explains the four principles, outlines the ways in which they differ, highlights the confusion resulting from not distinguishing amongst them, and argues that the term ‘pari passu’ is best used for only the first of the four.
Mokal, Riz, The Mysterious Pari Passu Principle (July 5, 2024).
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