Prior to the winding-up of an insolvent company, its creditors may individually enforce any measure available to them in order to obtain payment of the debt owed to them by such company. However, upon the opening of the winding-up proceedings these individual actions are replaced by a collective insolvency regime which attempts to ensure the rateable and equitable distribution of the assets of the insolvent company among its creditors. This distribution is known as pari passu distribution. The Essay will focus on the meaning of the Pari Passu principle, the origin and reason of said principle, examining the criticism it faces both positive and negative concluding with if it can truly be said of the pari passu that it is fundamental in corporate insolvency law. Pari passu is a Latin 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." Black's Law Dictionary defines pari passu as "proportionally; at an equal pace; without preference. The pari passu principle is derived from the maxim ‘equality is equity’: ‘The maxim that equality is equity expresses in a general way the object both of law and equity, namely to effect a distribution of property and losses proportionate to the several claims or to the several liabilities of the persons concerned. Equality in this connection does not necessarily mean literal equality, but may mean proportionate equality.’ “[T]he pari passu principle providing for equality of division among creditors is said to be one of the (if not the most) fundamental principles of the law of insolvency and is at the very heart of the who... ... middle of paper ... ...ovides for equality in sharing whatever assets are left after all the discounting which although may be little is surely beneficial to those receiving and is surely better than nothing. In conclusion it is clear the pari passu principal in practice is rarely achieved and is quite frankly easy to refer to as a glorified theoretical doctrine as it has been severely eroded. This being said it is impossible to discount the pari passu theory as a fundamental principle in corporate insolvency law as although not overly effective in the capacity it was created, the principle spreads all across insolvency law promoting fairness and efficiency in the distribution of assets in insolvency proceedings from the hierarchy and classes of claims to other rules for proportionality. It is a principle which advocates creditor protection which is a pillar of corporate insolvency law.
The decision of the House of Lords in City of London Building Society v Flegg marks a key stage in how the balance is drawn between occupiers and creditors in priority disputes; the seeds of which were originally planted in the Law of Property Act 1925. It posed a serious challenge to the conventional understanding of overreaching and the machinery of conveyancing.Ref ?
The first standard of equality is ontological equality which is the notion that everyone is created equal at birth. Ontological equality often justifies material inequality. In fact, this type of equality is sometimes used to put forth the notion that poverty is a virtue. A second standard of equality is equality of opportunity meaning that “everyone has an equal chance to achieve wealth, social prestige, and power because the rules of the game, so to speak, are the same for everyone”( Conley, 247). Therefore, any existing inequality is fair as long as everyone plays by the rules. The standard of equality is equality of condition, which is the idea that everyone should have an equal starting point. The last form of equality is equality of outcome which states, everyone should end up with the same outcome regardless of
The legislation is a complex in part because those creditors fall into so many categories-secured creditors, unsecured creditors, government creditors, and so on-each with its own special rights and interests in the bankruptcy process.
The principles of constitution of trusts are derived from the case of Milroy v Lord (1862 where turner L.J. stated that the complete constitution of a trust requires the actual transfer of property from the person making the gift to the beneficiary, a transfer of the intended gift to the trustees to be held in trust for the beneficiaries or the self-declaration of a trustee. The principle in this case is that a gift can only be enforced in equity if it satisfies one of the three requirements. Where the trust does not meet any of the three requirements the trust is considered an imperfect on incompletely constitutes trust. If the donor fails to complete all the formalities required by common law, then equity will not assist the intended beneficiary and thus the gift will be imperfect. The equitable maxim applicable is that equity will not complete an imperfect gift.
Having evaluated the current state of English contract law, mainly made up of piecemeal solutions, it can be seen that despite being satisfactory and doing its job, there still remain gaps within the law of contract where unfairness is not dealt with. Moreover, due to the ad hoc nature of those piecemeal solutions, the latter have often produced inconsistent justice and have manifested cases of unfairness. Hence, “a relatively small number of respected Justices have endeavored to draw attention to the fact that the application of a general principle might be useful and even necessary in English law.”
Under American law everyone is considered equal, the term equal refers to the many different ways people are treated the same in American society; even if they are not truly equal with each other. Everyone ranges from being poor to rich; they also range in
I. As one of the interpretations of the second principle of justice as fairness, Rawls argues that “democratic equality” is the best avenue for citizens to realize their life projects, as meeting of the difference principle with fair equality of opportunity. The second principle states that “social and economic inequalities are to be arranged so that they are both (a) reasonably expected to be to everyone’s advantage, and (b) attached to positions and offices open to all” (Rawls, 53). With an unequal distribution of situations, the purpose of society “is not to establish and secure the more attractive prospects of those better off unless doing so is to the advantage of those less fortunate” (Rawls, 65). The principles of justice are in place to ensure that the “assignment of rights and duties” through the basic structure of society justly distribute both the “benefits and burdens” of social and economic advantages (Rawls, 47).
There is an enormous prospect for the Pkolino Company to start a business. The current task has adequate resources and a great plan to keep it operational. Nevertheless, dangers that might plunge Pkolino Company into financial disaster are also present. This is due to the fact that there are always a couple of things that tend to advance in an unanticipated direction even in a well- planned plan. For instance, P’kolino Company’s financial statements do not have provisions for the worst, average, and best scenarios.
The legal issue of constitution of trusts is very important, judicial decisions over the years on cases where trusts were not properly constituted indicates that constitution of trusts could be quite complex and must be very cautiously done by a property owner as a simple factor could make his trust void. An express trust is completely constituted either by effectively transferring property to trustees or by effectively declaring a trust. In case of personal property, the declaration of the trust may be put in writing; however, equity will not perfect an imperfect gift. It is only when the trust is constituted that it is binding on the settlor. The long-standing idea that equity will not perfect an imperfect gift can be traced back to the 19th century cases of Ellison v Ellison and Milroy v Lord , and was further emphasized in the 20th century in the case of Re Fry .
The Doctrine of Proportionality is a general concept in law which is used to ensure the presence of fairness and justice in statutory interpretation processes. First enunciated in the High State Administrative Courts in Germany in the late 19th century to review the actions of the police, this doctrine has its application in several branches of law. For instance, in Constitutional law, it keeps a balance between the restriction imposed by a corrective measure and the severity of the nature of the prohibited act. Within Criminal Law,
The importance of the principle lies in the relationship of trust and confidence that exists be-tween the guarantor and the principal debtor, and the lender’s knowledge of such relationship.
The defendant is an Airlines Company that had 900 employees. The economic crisis followed with monetary crisis gave bad effects to the defendant. They should decrease the number of their airplanes form 9 to 2 airplanes. They also had to do the efficiency on their employees to 700. On the efficiency process, there was an agreement between the defendant and employees representation on October 30 1998. The agreement stated that they would bring Independent Public Accountant to analyze company financial condition. During the process, all side should work on their duty. The Defendant should pay employees’ wage. The agreement was not guarantee that didn’t mean the dispute process was over, but the negotiation still moved on. During the process, there was another agreement between the defendant and several employees. They agreed the finish the disputed process and the employees would get separation pay. Meanwhile, other employees, who were 153 people didn’t agree with that agreement. Because they didn’t agree each other, so the employees gave the case to the “Panitia Penyelesaian Perselisihan Perburuhan Pusat (P4P)”.
Also, if possible actions should be taken to ease the worries of existing bondholders and institutional investors. Management may consider sharing the debt more equally between the two divisions in an effort to prevent downgrading of the credit rating and loss of investors.
Also, in instances where the issuer fails to pay the principal amount back to the bond holder,