Canada Business Corporations Act (R.S.C., 1985, c. C-44)

Act current to 2017-11-06 and last amended on 2015-02-26. Previous Versions

PART VIIITrust Indentures

Marginal note:Definitions
  •  (1) In this Part,

    event of default

    cas de défaut

    event of default means an event specified in a trust indenture on the occurrence of which

    • (a) a security interest constituted by the trust indenture becomes enforceable, or

    • (b) the principal, interest and other moneys payable thereunder become or may be declared to be payable before maturity,

    but the event is not an event of default until all conditions prescribed by the trust indenture in connection with such event for the giving of notice or the lapse of time or otherwise have been satisfied; (cas de défaut)

    trustee

    fiduciaire

    trustee means any person appointed as trustee, including the administrator of the property of others, under the terms of a trust indenture to which a corporation is a party and includes any successor trustee; (fiduciaire)

    trust indenture

    acte de fiducie

    trust indenture means any deed, indenture or other instrument or act, including any supplement or amendment, made by a corporation after its incorporation or continuance under this Act, under which the corporation issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations. (acte de fiducie)

  • Marginal note:Application

    (2) This Part applies to a trust indenture if the debt obligations issued or to be issued under the trust indenture are part of a distribution to the public.

  • Marginal note:Exemption

    (3) The Director may exempt a trust indenture from this Part if the trust indenture, the debt obligations issued thereunder and the security interest effected thereby are subject to a law of a province or a country other than Canada that is substantially equivalent to this Part.

  • R.S., 1985, c. C-44, s. 82;
  • 2001, c. 14, s. 34(F);
  • 2011, c. 21, s. 42.
Marginal note:Conflict of interest
  •  (1) No person shall be appointed as trustee if there is a material conflict of interest between their role as trustee and their role in any other capacity.

  • Marginal note:Eliminating conflict of interest

    (2) A trustee shall, within ninety days after becoming aware that a material conflict of interest exists

    • (a) eliminate such conflict of interest; or

    • (b) resign from office.

  • Marginal note:Validity

    (3) A trust indenture, any debt obligations issued thereunder and a security interest effected thereby are valid notwithstanding a material conflict of interest of the trustee.

  • Marginal note:Removal of trustee

    (4) If a trustee contravenes subsection (1) or (2), any interested person may apply to a court for an order that the trustee be replaced, and the court may make an order on such terms as it thinks fit.

  • R.S., 1985, c. C-44, s. 83;
  • 2001, c. 14, s. 135(E).
Marginal note:Qualification of trustee

 A trustee, or at least one of the trustees if more than one is appointed, shall be a body corporate incorporated under the laws of Canada or a province and authorized to carry on the business of a trust company.

  • 1974-75-76, c. 33, s. 79;
  • 1978-79, c. 9, s. 1(F).
Marginal note:List of security holders
  •  (1) A holder of debt obligations issued under a trust indenture may, on payment to the trustee of a reasonable fee, require the trustee to furnish, within fifteen days after delivering to the trustee the statutory declaration referred to in subsection (4), a list setting out

    • (a) the names and addresses of the registered holders of the outstanding debt obligations,

    • (b) the principal amount of outstanding debt obligations owned by each such holder, and

    • (c) the aggregate principal amount of debt obligations outstanding

    as shown on the records maintained by the trustee on the day that the statutory declaration is delivered to that trustee.

  • Marginal note:Duty of issuer

    (2) On the demand of a trustee, the issuer of debt obligations shall furnish the trustee with the information required to enable the trustee to comply with subsection (1).

  • Marginal note:Corporate applicant

    (3) If the person requiring the trustee to furnish a list under subsection (1) is a body corporate, the statutory declaration required under that subsection shall be made by a director or officer of the body corporate.

  • Marginal note:Contents of statutory declaration

    (4) The statutory declaration required under subsection (1) shall state

    • (a) the name and address of the person requiring the trustee to furnish the list and, if the person is a body corporate, the address for service thereof; and

    • (b) that the list will not be used except as permitted under subsection (5).

  • Marginal note:Use of list

    (5) A list obtained under this section shall not be used by any person except in connection with

    • (a) an effort to influence the voting of the holders of debt obligations;

    • (b) an offer to acquire debt obligations; or

    • (c) any other matter relating to the debt obligations or the affairs of the issuer or guarantor thereof.

  • Marginal note:Offence

    (6) A person who, without reasonable cause, contravenes subsection (5) is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

  • 1974-75-76, c. 33, s. 80;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Evidence of compliance
  •  (1) An issuer or a guarantor of debt obligations issued or to be issued under a trust indenture shall, before doing any act under paragraph (a), (b) or (c), furnish the trustee with evidence of compliance with the conditions in the trust indenture relating to

    • (a) the issue, certification and delivery of debt obligations under the trust indenture;

    • (b) the release or release and substitution of property subject to a security interest constituted by the trust indenture; or

    • (c) the satisfaction and discharge of the trust indenture.

  • Marginal note:Duty of issuer or guarantor

    (2) On the demand of a trustee, the issuer or guarantor of debt obligations issued or to be issued under a trust indenture shall furnish the trustee with evidence of compliance with the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.

  • 1974-75-76, c. 33, s. 81;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Contents of declaration, etc.

 Evidence of compliance as required by section 86 shall consist of

  • (a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in that section have been complied with; and

  • (b) where the trust indenture requires compliance with conditions that are subject to review

    • (i) by legal counsel, an opinion of legal counsel that such conditions have been complied with, and

    • (ii) by an auditor or accountant, an opinion or report of the auditor of the issuer or guarantor, or such other accountant as the trustee may select, that such conditions have been complied with.

  • 1974-75-76, c. 33, s. 82;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Further evidence of compliance

 The evidence of compliance referred to in section 87 shall include a statement by the person giving the evidence

  • (a) declaring that they have read and understand the conditions of the trust indenture described in section 86;

  • (b) describing the nature and scope of the examination or investigation on which the certificate, statement or opinion is based; and

  • (c) declaring that they have made the examination or investigation that they believe necessary to enable them to make their statements or give their opinions.

  • R.S., 1985, c. C-44, s. 88;
  • 2001, c. 14, s. 135(E).
 
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