Pari Passu: One of the clauses used in debenture is pari passu. The clause means that all the debentures of the series are to be paid ratably. The amount of debentures is insufficient to meet the whole debts secured by the series of debentures. If the pari passu clause is not made use of then the debenture’s rank in reference with the date of issue and if their issuing date is same as they are payable in their numerical order. A new series of debentures cannot be issued so as to rank pari passu with the prior series unless given in the debenture deed of the previous series.
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