PART VICorporate Governance (continued)
DIVISION XVILiquidation and Dissolution (continued)
Simple Liquidation (continued)
Marginal note:Dissolution instrument
384 (1) Unless a court has made an order in accordance with subsection 385(1), the Minister may, if satisfied that the company has complied with subsection 383(4) and that all the circumstances so warrant, issue letters patent dissolving the company.
Marginal note:Company dissolved
(2) A company 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.
Marginal note:Application for court supervision
385 (1) The Superintendent or any interested person may, at any time during the liquidation of a company, 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 386 to 398 and on such application the court may so order and make any further order it thinks fit.
(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
Marginal note:Commencement of liquidation
(2) The supervision of the liquidation of a company by the court pursuant to an order made under subsection 385(1) commences on the day the order is made.
Marginal note:Powers of court
387 In connection with the liquidation and dissolution of a company, the court may, where it is satisfied that the company is able to pay or adequately provide for the discharge of all its obligations and to make satisfactory arrangements for the protection of its policyholders, 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 company;
(f) an order, at any stage of the proceedings, restraining the directors and officers of the company from
(g) an order determining and enforcing the duty or liability of any present or former director, officer, shareholder or policyholder
(h) an order approving the payment, satisfaction or compromise of claims against the company 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 company, 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 company;
(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 394 to 396, an order approving any proposed, interim or final distribution to shareholders, if any, or incorporators, in money or in property;
(m) an order disposing of any property belonging to creditors, shareholders, policyholders, and incorporators who cannot be found;
(n) on the application of any director, officer, shareholder, policyholder, incorporator, creditor or the liquidator;
(o) after the liquidator has rendered the liquidator’s final account to the court, an order directing the company to apply to the Minister for letters patent dissolving the company.
- 1991, c. 47, s. 387
- 2005, c. 54, s. 292(F)
Marginal note:Cessation of business and powers
(a) the company 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 and shareholders, if any, are vested in the liquidator and cease to be vested in the directors or shareholders, 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 or shareholders, if any.
Marginal note:Appointment of liquidator
389 When making an order for the liquidation of a company or at any time thereafter, the court may appoint any person, including a director, an officer or a shareholder of the company or any other company, as liquidator of the company.
Marginal note:Vacancy in liquidator’s office
390 Where an order for the liquidation of a company has been made and the office of liquidator is or becomes vacant, the property of the company is under the control of the court until the office of liquidator is filled.
Marginal note:Duties of liquidator
(a) forthwith after appointment give notice thereof to the Superintendent and to each claimant and creditor of the company 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 company has transacted any business within the preceding twelve months, requiring
(i) any person indebted to the company 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 company to deliver it to the liquidator at the time and place specified in the notice, and
(iii) any person having a claim against the company, whether liquidated, unliquidated, future or contingent, other than a policyholder having an unliquidated claim, 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 company;
(d) [Repealed, 1997, c. 15, s. 240]
(e) open and maintain a trust account for the moneys received by the liquidator in the course of the liquidation of the company;
(f) keep accounts of the moneys received and paid out by the liquidator in the course of the liquidation of the company;
(g) maintain separate lists of each class of creditors, shareholders, policyholders and other persons having claims against the company;
(h) if at any time the liquidator determines that the company is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions;
(i) 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 company prepared in accordance with subsection 331(1) or prepared in such manner as the liquidator thinks proper or as the court requires; and
(j) after the final accounts are approved by the court, distribute any remaining property of the company among the shareholders, if any, or incorporators, according to their respective rights.
Marginal note:Powers of liquidator
(2) A liquidator may
(a) retain actuaries, 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 company;
(c) carry on the business of the company as required for an orderly liquidation;
(d) sell by public auction or private sale any property of the company;
(e) do all acts and execute documents in the name and on behalf of the company;
(f) borrow money on the security of the property of the company;
(g) settle or compromise any claims by or against the company; and
(h) do all other things necessary for the liquidation of the company and distribution of its property.
- 1991, c. 47, s. 391
- 1997, c. 15, s. 240
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