Par conditio creditorum
Equality of creditors
Par conditio creditorum is the principle that all creditors must be treated equally in bankruptcy or insolvency proceedings.
Par conditio creditorum, also known as the principle of equality among creditors, constitutes a fundamental tenet of Dutch insolvency law. It provides that creditors of the same rank are, in principle, to be satisfied pro rata their claims from the estate.
This principle serves to prevent one or more creditors from being preferred over others, thereby safeguarding the integrity of the collective proceedings. In practice, it results in the avoidance of selective payments or security rights granted during the suspect period.
“The trustee invoked the par conditio creditorum to recover the payment made to an individual supplier during the suspect period.”
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