PART IAdministrative Officials (continued)
Duties and Powers of Trustees (continued)
Marginal note:Borrowing powers with permission of court
31 (1) With the permission of the court, an interim receiver, a receiver within the meaning of subsection 243(2) or a trustee may make necessary or advisable advances, incur obligations, borrow money and give security on the debtor’s property in any amount, on any terms and on any property that may be authorized by the court and those advances, obligations and money borrowed must be repaid out of the debtor’s property in priority to the creditors’ claims.
Marginal note:Security under Bank Act
(2) For the purpose of giving security under section 427 of the Bank Act, the interim receiver, receiver or trustee, when carrying on the business of the bankrupt, is deemed to be a person engaged in the class of business previously carried on by the bankrupt.
Marginal note:Limit of obligations and carrying on of business
(3) The creditors or inspectors may by resolution limit the amount of the obligations that may be incurred, the advances that may be made or moneys that may be borrowed by the trustee and may limit the period of time during which the business of the bankrupt may be carried on by the trustee.
Marginal note:Debts deemed to be debts of estate
(4) All debts incurred and credit received in carrying on the business of a bankrupt are deemed to be debts incurred and credit received by the estate of the bankrupt.
- R.S., 1985, c. B-3, s. 31
- 1991, c. 46, s. 584
- 2005, c. 47, s. 24
Marginal note:Trustee not obliged to carry on business
32 The trustee is not under obligation to carry on the business of the bankrupt where in his opinion the realizable value of the property of the bankrupt is insufficient to protect him fully against possible loss occasioned by so doing and the creditors or inspectors, on demand made by the trustee, neglect or refuse to secure him against such possible loss.
- R.S., c. B-3, s. 15
Marginal note:Reimbursement only of trustee’s disbursement advances
33 The court may make an order providing for the sale of any or all of the assets of the estate of the bankrupt, either by tender, private sale or public auction, setting out the terms and conditions of the sale and directing that the proceeds from the sale are to be used for the purpose of reimbursing the trustee in respect of any costs that may be owing to the trustee or of any moneys the trustee may have advanced as disbursements for the benefit of the estate.
- R.S., 1985, c. B-3, s. 33
- 2005, c. 47, s. 25
Marginal note:Trustee may apply to court for directions
34 (1) A trustee may apply to the court for directions in relation to any matter affecting the administration of the estate of a bankrupt and the court shall give in writing such directions, if any, as to it appear proper in the circumstances.
Marginal note:To report to court after three years
(2) Where an estate has not been fully administered within three years after the bankruptcy, the trustee shall, if requested to do so by the Superintendent, report that fact to the court as soon as practicable thereafter, and the court shall make such order as it considers fit to expedite the administration.
Marginal note:Notice to Superintendent’s division office
(3) The trustee must send notice to the Superintendent’s division office of the day and time when any application for directions made under subsection (1) is to be heard and of the day and time when the trustee intends to report to the court as required by the Superintendent under subsection (2).
- R.S., 1985, c. B-3, s. 34
- 1992, c. 27, s. 12
- 2005, c. 47, s. 26
Marginal note:Redirection of mail
request that any mail addressed to a bankrupt that is directed to any place referred to in the notice be redirected or sent by the Canada Post Corporation to the trustee or to such other person as the trustee may designate and when Canada Post Corporation receives those documents, it shall so redirect or send that mail.
Marginal note:Permission for residence
(2) A notice referred to in subsection (1) may refer to a bankrupt’s residence only where the trustee has, on application, obtained permission from the court.
Marginal note:Time limitation
(3) If a bankrupt is an individual, a notice referred to in subsection (1) is operative only during the three-month period immediately after the date of the bankruptcy unless the court, on application, extends that period on any terms that it considers fit.
- R.S., 1985, c. B-3, s. 35
- 1992, c. 27, s. 13
- 1997, c. 12, s. 23
- 2005, c. 47, s. 27
Marginal note:Duty of former trustee on substitution
36 (1) On the appointment of a substituted trustee, the former trustee shall without delay pass his or her accounts before the court and deliver to the substituted trustee all the property of the estate, together with all books, records and documents of the bankrupt and of the administration of the estate, as well as a statement of receipts and disbursements that contains a complete account of all moneys received by the trustee out of the property of the bankrupt or otherwise, the amount of interest received by the trustee, all moneys disbursed and expenses incurred and the remuneration claimed by the trustee, together with full particulars, description and value of all the bankrupt’s property that has not been sold or realized, setting out the reason why the property has not been sold or realized and the disposition made of the property.
Marginal note:Duty of substituted trustee
(2) A substituted trustee shall
(a) [Repealed, 1992, c. 27, s. 14]
(b) if appointed by the creditors, file with the court a copy of the minutes of the meeting signed by the chair;
(c) notify the Superintendent of his appointment;
(d) if required by the inspectors, register a notice of the appointment in the land register of any land titles or registry office where the assignment or bankruptcy order has been registered; and
(e) as soon as funds are available, pay to the former trustee his remuneration and disbursements as approved by the court.
- R.S., 1985, c. B-3, s. 36
- 1992, c. 27, s. 14
- 1997, c. 12, s. 24
- 2004, c. 25, s. 23
- 2005, c. 47, ss. 28, 123(E)
- 2007, c. 36, s. 11(F)
Marginal note:Appeal to court against trustee
37 Where the bankrupt or any of the creditors or any other person is aggrieved by any act or decision of the trustee, he may apply to the court and the court may confirm, reverse or modify the act or decision complained of and make such order in the premises as it thinks just.
- R.S., c. B-3, s. 19
Marginal note:Proceeding by creditor when trustee refuses to act
38 (1) Where a creditor requests the trustee to take any proceeding that in his opinion would be for the benefit of the estate of a bankrupt and the trustee refuses or neglects to take the proceeding, the creditor may obtain from the court an order authorizing him to take the proceeding in his own name and at his own expense and risk, on notice being given the other creditors of the contemplated proceeding, and on such other terms and conditions as the court may direct.
Marginal note:Transfer to creditor
(2) On an order under subsection (1) being made, the trustee shall assign and transfer to the creditor all his right, title and interest in the chose in action or subject-matter of the proceeding, including any document in support thereof.
Marginal note:Benefits belong to creditor
(3) Any benefit derived from a proceeding taken pursuant to subsection (1), to the extent of his claim and the costs, belongs exclusively to the creditor instituting the proceeding, and the surplus, if any, belongs to the estate.
Marginal note:Trustee may institute proceeding
(4) Where, before an order is made under subsection (1), the trustee, with the permission of the inspectors, signifies to the court his readiness to institute the proceeding for the benefit of the creditors, the order shall fix the time within which he shall do so, and in that case the benefit derived from the proceeding, if instituted within the time so fixed, belongs to the estate.
- R.S., 1985, c. B-3, s. 38
- 2004, c. 25, s. 24(F)
Remuneration of Trustee
Marginal note:To be voted by creditors
Marginal note:Not to exceed 7½ per cent
(2) Where the remuneration of the trustee has not been fixed under subsection (1), the trustee may insert in his final statement and retain as his remuneration, subject to increase or reduction as hereinafter provided, a sum not exceeding seven and one-half per cent of the amount remaining out of the realization of the property of the debtor after the claims of the secured creditors have been paid or satisfied.
Marginal note:For carrying on debtor’s business or in case of a proposal
(3) Where the business of the debtor has been carried on by the trustee or under his supervision, he may be allowed such special remuneration for such services as the creditors or the inspectors may by resolution authorize, and, in the case of a proposal, such special remuneration as may be agreed to by the debtor, or in the absence of agreement with the debtor such amount as may be approved by the court.
Marginal note:Successive trustees
(4) In the case of two or more trustees acting in succession, the remuneration shall be apportioned between the trustees in accordance with the services rendered by each, and in the absence of agreement between the trustees the court shall determine the amount payable to each.
Marginal note:Court may increase or reduce
(5) On application by the trustee, a creditor or the debtor and on notice to such parties as the court may direct, the court may make an order increasing or reducing the remuneration.
- R.S., c. B-3, s. 21
- Date modified: