pro rata

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Pro Rata

[Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share.

In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. If the debtor has any remaining funds, the money is divided proportionately among the creditors, according to the amount of the individual debts.

A pro rata clause in an automobile insurance policy provides that when an insured person has other insurance policies covering the same type of risk, the company issuing the policy with the pro rata clause will be liable only for a proportion of the loss represented by the ratio between its policy limit and the total limits of all the available insurance.

pro rata

(proh rat-ah or proh ray-tah) adj. from Latin for "in proportion," referring to a share to be received or an amount to be paid based on the fractional share of ownership, responsibility, or time used. Examples: an heir who receives one-quarter of an estate may be responsible for one quarter of the estate taxes as his/her pro rata share. A buyer of a rental property will pay his/her pro rata share of the property taxes for that portion of the year in which he/she holds title.

pro rata

adjective alloted, apportioned, distributed, equivalently, in proportion, on even terms, proportionate
Associated concepts: apportionment, pro rata share

pro rata

adverb each to each, in equal shares, respectively, to each according to his share
See also: per capita

PRO RATA. According to the rate, proportion or allowance. A creditor of an insolvent estate, is to be paid pro rata with creditors of the same class.

References in periodicals archive ?
Also, during the reinvestment period, and after the preference shares have achieved an annualized coupon of 16%, 50% of the remaining interest proceeds will be used to redeem the class B and C notes on a pro rata basis.
In the event that any of these tests are not met, payments will be made on a pro rata basis (except for the senior coverage test, pursuant to which payments are made first, to the class A-FP and A-1 notes and second, to the class A-FP and A-2 notes) to pay down the principal amount of the notes included in the coverage test until the failing coverage test is cured.
Therefore, in accordance with the terms of the tender offer, the Fund is purchasing shares on a pro rata basis from all tendering stockholders, other than stockholders holding 99 or fewer shares who tendered all their shares and from whom the Fund is accepting all shares properly tendered (aggregating 24,835.
If the audited consolidated financial statements of GRC do not reflect at least $4,819,500 of after-tax net income or $5,823,465 of after-tax net income before minority interest for the fiscal year ending December 31, 2006, one-half of the escrow shares will be distributed on a pro rata basis to the investors.