Latin for Lawyers

L ATIN FOR L AWYERS

PREEMPT, PREEMPTION [L. prae + emereo, emerere / to earn through ser vice, to acquire; to buy] To take control of. To take to the exclusion of others. The doctrine under which the federal government, based on the supremacy clause in the Consti tution, takes and assumes for itself control over various issues and matters, to the exclusion of the states. One such area is interstate commerce; another is bankruptcy. Once Congress has legislated to control a given area, the states may not. Similarly, a state statute will preempt a local ordinance or rule. Also the privilege granted by the federal government to designated persons to set tle upon public land and to acquire title to the exclusion of all others after paying a specified price. PREEMPTIVE RIGHT A right of first refusal. The right of a stockholder in a corporation to purchase the same percentage of a new issue of stock as he holds at the time of issue. The purpose is to prevent dilution of value, ownership and control. PREFERENCE, PREFERENTIAL [L. prae / before + fero, ferre / to bear or bring; to carry] Having priority in rank or standing. The right to prior payment of a debt. A payment or a transfer of property made by an insolvent debtor to a creditor who has no greater rights to payment than other creditors of equal rank, i.e., more than the creditor would receive if the debtor's assets were distributed pro rata to all creditors of equal rank. In bankruptcy law, a preference is any payment made by the debtor to a creditor within 90 days before the filing of the bankruptcy petition. A preference may be set aside by the trustee in bank ruptcy. PREFERRED [L. praeffero, praeferre / to place in front of; to display, to pre fer] A thing placed ahead of other things. Having a priority or special right not available to others. A preferred creditor has rights of security and/or payment superior to those of junior creditors. Preferred stock is a class of corporate stock which has priority over other classes in distribution of the corporate equity and of dividends, especially over common stock. A preferred dividend is a dividend on preferred stock. A preferred risk in insurance law is a risk which has a lower chance of creating loss than others and is therefore entitled to a lower premium. PREJUDICE [L. prae / before + iudico, iudicare, iudicium / to judge; judg ment] An irrational hostility by one individual or group against another individual or group, usually based upon the latter's race, color, religion or opinions. Any

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