Pari passu means "equal in right of payment". The pari passu principle means that all unsecured creditors in insolvency processes, such as administration, liquidation and bankruptcy must share equally any available assets of the company or individual, or any proceeds from the sale of any of those assets, in proportion to the debts due to each creditor. It is one of the most fundamental principles of insolvency law, although it can be varied by agreement.

For more information, see Practice note, How are assets distributed to creditors in corporate insolvency procedures?