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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2021-10-07 and last amended on 2021-06-30. Previous Versions

PART VICorporate Governance (continued)

Financial Statements and Auditors (continued)

Simple Liquidation (continued)

Marginal note:Dissolution instrument

  •  (1) Unless a court has made an order in accordance with subsection 347(1), the Minister may, if satisfied that the bank has complied with subsection 345(4) and that all the circumstances so warrant, issue letters patent dissolving the bank.

  • Marginal note:Bank dissolved

    (2) A bank in respect of which letters patent are issued under subsection (1) is dissolved and ceases to exist on the day stated in the letters patent.

Court-supervised Liquidation

Marginal note:Application for court supervision

  •  (1) The Superintendent or any interested person may, at any time during the liquidation of a bank, apply to a court for an order for the continuance of the voluntary liquidation under the supervision of the court in accordance with this section and sections 348 to 360 and on such application the court may so order and make any further order it thinks fit.

  • Marginal note:Idem

    (2) An application under subsection (1) to a court to supervise a voluntary liquidation shall state the reasons, verified by an affidavit of the applicant, why the court should supervise the liquidation.

  • Marginal note:Notice to Superintendent

    (3) Where a person, other than the Superintendent, makes an application under subsection (1), the person shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

Marginal note:Court supervision thereafter

  •  (1) When a court makes an order under subsection 347(1), the liquidation of the bank shall continue under the supervision of the court.

  • Marginal note:Commencement of liquidation

    (2) The supervision of the liquidation of a bank by the court pursuant to an order made under subsection 347(1) commences on the day the order is made.

Marginal note:Powers of court

 In connection with the liquidation and dissolution of a bank, the court may, where it is satisfied that the bank is able to pay or adequately provide for the discharge of all its obligations, make any order it thinks fit including, without limiting the generality of the foregoing,

  • (a) an order to liquidate;

  • (b) an order appointing a liquidator, with or without security, fixing a liquidator’s remuneration and replacing a liquidator;

  • (c) an order appointing inspectors or referees, specifying their powers, fixing their remuneration and replacing inspectors or referees;

  • (d) an order determining the notice to be given to any interested person, or dispensing with notice to any person;

  • (e) an order determining the validity of any claims made against the bank;

  • (f) an order, at any stage of the proceedings, restraining the directors and officers of the bank from

    • (i) exercising any of their powers, or

    • (ii) collecting or receiving any debt or other property of the bank, and from paying out or transferring any property of the bank, except as permitted by the court;

  • (g) an order determining and enforcing the duty or liability of any present or former director, officer, shareholder or member

    • (i) to the bank, or

    • (ii) for an obligation of the bank;

  • (h) an order approving the payment, satisfaction or compromise of claims against the bank and the retention of assets for that purpose, and determining the adequacy of provisions for the payment, discharge or transfer of any obligation of the bank, whether liquidated, unliquidated, future or contingent;

  • (i) with the concurrence of the Superintendent, an order providing for the disposal or destruction of the documents, records or registers of the bank;

  • (j) on the application of a creditor, an inspector or the liquidator, an order giving directions on any matter arising in the liquidation;

  • (k) after notice has been given to all interested parties, an order relieving the liquidator from any omission or default on such terms as the court thinks fit and confirming any act of the liquidator;

  • (l) subject to sections 356 to 358, an order approving any proposed, interim or final distribution to shareholders or members, as the case may be, or incorporators, in money or in property;

  • (m) an order disposing of any property belonging to creditors, shareholders, members and incorporators who cannot be found;

  • (n) on the application of any director, officer, shareholder, member, incorporator, creditor or the liquidator,

    • (i) an order staying the liquidation proceedings on such terms and conditions as the court thinks fit,

    • (ii) an order continuing or discontinuing the liquidation proceedings, or

    • (iii) an order to the liquidator to restore to the bank all of its remaining property; and

  • (o) after the liquidator has rendered the liquidator’s final account to the court, an order directing the bank to apply to the Minister for letters patent dissolving the bank.

  • 1991, c. 46, s. 349
  • 2005, c. 54, s. 77(F)
  • 2010, c. 12, s. 2040

Marginal note:Cessation of business and powers

  •  (1) Where a court makes an order for the liquidation of a bank,

    • (a) the bank continues in existence but shall cease to carry on business, except the business that is, in the opinion of the liquidator, required for an orderly liquidation; and

    • (b) the powers of the directors, shareholders and members are vested in the liquidator and cease to be vested in the directors, shareholders and members, except as specifically authorized by the court.

  • Marginal note:Delegation by liquidator

    (2) A liquidator may delegate any of the powers vested by paragraph (1)(b) to the directors, shareholders or members, if any.

  • 1991, c. 46, s. 350
  • 2010, c. 12, s. 2041

Marginal note:Appointment of liquidator

 When making an order for the liquidation of a bank, or at any later time, the court may appoint any person, including a director, an officer, a shareholder or a member of the bank or any other bank, as liquidator of the bank.

  • 1991, c. 46, s. 351
  • 2010, c. 12, s. 2042

Marginal note:Vacancy in liquidator’s office

 Where an order for the liquidation of a bank has been made and the office of liquidator is or becomes vacant, the property of the bank is under the control of the court until the office of liquidator is filled.

Marginal note:Duties of liquidator

  •  (1) A liquidator shall

    • (a) forthwith after appointment give notice thereof to the Superintendent and to each claimant and creditor of the bank known to the liquidator;

    • (b) forthwith after appointment publish notice thereof once a week for four consecutive weeks in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the bank has transacted any business within the preceding twelve months, requiring

      • (i) any person indebted to the bank to render an account and pay to the liquidator at the time and place specified in the notice any amount owing,

      • (ii) any person possessing property of the bank to deliver it to the liquidator at the time and place specified in the notice, and

      • (iii) any person having a claim against the bank, whether liquidated, unliquidated, future or contingent, to present particulars thereof in writing to the liquidator not later than sixty days after the first publication of the notice;

    • (c) take into custody and control the property of the bank;

    • (d) open and maintain a trust account for the moneys received by the liquidator in the course of the liquidation of the bank;

    • (e) keep accounts of the moneys received and paid out by the liquidator in the course of the liquidation of the bank;

    • (f) maintain separate lists of members and of each class of creditors, shareholders and other persons having claims against the bank;

    • (g) if at any time the liquidator determines that the bank is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions;

    • (h) deliver to the court and to the Superintendent, at least once in every twelve month period after the liquidator’s appointment or more often as the court requires, the annual statement of the bank prepared in accordance with subsection 308(1) or prepared in such manner as the liquidator thinks proper or as the court requires; and

    • (i) after the final accounts are approved by the court, distribute any remaining property of the bank among the shareholders, incorporators or members, according to their respective rights.

  • Marginal note:Powers of liquidator

    (2) A liquidator may

    • (a) retain lawyers, notaries, accountants, appraisers and other professional advisers;

    • (b) bring, defend or take part in any civil, criminal or administrative action or proceeding in the name and on behalf of the bank;

    • (c) carry on the business of the bank as required for an orderly liquidation;

    • (d) sell by public auction or private sale any property of the bank;

    • (e) do all acts and execute documents in the name and on behalf of the bank;

    • (f) borrow money on the security of the property of the bank;

    • (g) settle or compromise any claims by or against the bank; and

    • (h) do all other things necessary for the liquidation of the bank and distribution of its property.

  • 1991, c. 46, s. 353
  • 2010, c. 12, s. 2043
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