PART IIBankruptcy Orders and Assignments (continued)
Interim Receiver (continued)
Marginal note:Application of sections 43 to 46
48 Sections 43 to 46 do not apply to individuals whose principal occupation and means of livelihood is fishing, farming or the tillage of the soil or to any individual who works for wages, salary, commission or hire at a rate of compensation not exceeding twenty-five hundred dollars per year and does not on their own account carry on business.
- R.S., 1985, c. B-3, s. 48
- 1997, c. 12, s. 28
Marginal note:Assignment for general benefit of creditors
49 (1) An insolvent person or, if deceased, the executor or administrator of their estate or the liquidator of the succession, with the leave of the court, may make an assignment of all the insolvent person’s property for the general benefit of the insolvent person’s creditors.
Marginal note:Sworn statement
(2) The assignment must be accompanied by a sworn statement in the prescribed form showing the debtor’s property that is divisible among his or her creditors, the names and addresses of all his or her creditors and the amounts of their respective claims.
Marginal note:Filing of assignment
(3) The assignment made under subsection (1) shall be offered to the official receiver in the locality of the debtor, and it is inoperative until filed with that official receiver, who shall refuse to file the assignment unless it is in the prescribed form or to the like effect and accompanied by the sworn statement required by subsection (2).
Marginal note:Appointment of trustee
(4) Where the official receiver files the assignment made under subsection (1), he shall appoint as trustee a licensed trustee whom he shall, as far as possible, select by reference to the wishes of the most interested creditors if ascertainable at the time, and the official receiver shall complete the assignment by inserting therein as grantee the name of the trustee.
Marginal note:Cancellation of assignment
(5) Where the official receiver is unable to find a licensed trustee who is willing to act, the official receiver shall, after giving the bankrupt five days notice, cancel the assignment.
Marginal note:Procedure in small estates
(6) Where the bankrupt is not a corporation and in the opinion of the official receiver the realizable assets of the bankrupt, after the claims of secured creditors are deducted, will not exceed five thousand dollars or such other amount as is prescribed, the provisions of this Act relating to the summary administration of estates shall apply.
Marginal note:Future property not to be considered
(7) In the determination of the realizable assets of a bankrupt for the purposes of subsection (6), no regard shall be had to any property that may be acquired by the bankrupt or devolve on the bankrupt before the bankrupt’s discharge.
Marginal note:Where subsection (6) ceases to apply
(8) The official receiver may direct that subsection (6) shall cease to apply in respect of the bankrupt where the official receiver determines that
(a) the realizable assets of the bankrupt, after the claims of secured creditors are deducted, exceed five thousand dollars or the amount prescribed, as the case may be, or
(b) the costs of realization of the assets of the bankrupt are a significant proportion of the realizable value of the assets,
and the official receiver considers that such a direction is appropriate.
- R.S., 1985, c. B-3, s. 49
- 1992, c. 1, s. 15, c. 27, s. 17
- 1997, c. 12, s. 29
- 2004, c. 25, s. 31(E)
- 2005, c. 47, s. 33
DIVISION IGeneral Scheme for Proposals
Marginal note:Who may make a proposal
Marginal note:Where proposal may not be made
(1.1) A proposal may not be made under this Division with respect to a debtor in respect of whom a consumer proposal has been filed under Division II until the administrator under the consumer proposal has been discharged.
Marginal note:To whom proposal made
(1.2) A proposal must be made to the creditors generally, either as a mass or separated into classes as provided in the proposal, and may also be made to secured creditors in respect of any class or classes of secured claim, subject to subsection (1.3).
(1.3) Where a proposal is made to one or more secured creditors in respect of secured claims of a particular class, the proposal must be made to all secured creditors in respect of secured claims of that class.
Marginal note:Classes of secured claims
(1.4) Secured claims may be included in the same class if the interests or rights of the creditors holding those claims are sufficiently similar to give them a commonality of interest, taking into account
(a) the nature of the debts giving rise to the claims;
(b) the nature and rank of the security in respect of the claims;
(c) the remedies available to the creditors in the absence of the proposal, and the extent to which the creditors would recover their claims by exercising those remedies;
(d) the treatment of the claims under the proposal, and the extent to which the claims would be paid under the proposal; and
(e) such further criteria, consistent with those set out in paragraphs (a) to (d), as are prescribed.
Marginal note:Court may determine classes
(1.5) The court may, on application made at any time after a notice of intention or a proposal is filed, determine, in accordance with subsection (1.4), the classes of secured claims appropriate to a proposal, and the class into which any particular secured claim falls.
Marginal note:Creditors’ response
(1.6) Subject to section 50.1 as regards included secured creditors, any creditor may respond to the proposal as made to the creditors generally, by filing with the trustee a proof of claim in the manner provided for in
Marginal note:Effect of filing proof of claim
(1.7) Hereinafter in this Division, a reference to an unsecured creditor shall be deemed to include a secured creditor who has filed a proof of claim under subsection (1.6), and a reference to an unsecured claim shall be deemed to include that secured creditor’s claim.
(1.8) All questions relating to a proposal, except the question of accepting or refusing the proposal, shall be decided by ordinary resolution of the creditors to whom the proposal was made.
Marginal note:Documents to be filed
(2) Subject to section 50.4, proceedings for a proposal shall be commenced, in the case of an insolvent person, by filing with a licensed trustee, and in the case of a bankrupt, by filing with the trustee of the estate,
Marginal note:Filing of documents with the official receiver
(2.1) Copies of the documents referred to in subsection (2) must, at the time the proposal is filed under subsection 62(1), also be filed by the trustee with the official receiver in the locality of the debtor.
Marginal note:Approval of inspectors
(3) A proposal made in respect of a bankrupt shall be approved by the inspectors before any further action is taken thereon.
Marginal note:Proposal, etc., not to be withdrawn
(4) No proposal or any security, guarantee or suretyship tendered with the proposal may be withdrawn pending the decision of the creditors and the court.
Marginal note:Assignment not prevented
(4.1) Subsection (4) shall not be construed as preventing an insolvent person in respect of whom a proposal has been made from subsequently making an assignment.
Marginal note:Duties of trustee
(5) The trustee shall make or cause to be made such an appraisal and investigation of the affairs and property of the debtor as to enable the trustee to estimate with reasonable accuracy the financial situation of the debtor and the cause of the debtor’s financial difficulties or insolvency and report the result thereof to the meeting of the creditors.
Marginal note:Trustee to file cash-flow statement
(6) The trustee shall, when filing a proposal under subsection 62(1) in respect of an insolvent person, file with the proposal
(a) a statement — or a revised cash-flow statement if a cash-flow statement had previously been filed under subsection 50.4(2) in respect of that insolvent person — (in this section referred to as a “cash-flow statement”) indicating the projected cash-flow of the insolvent person on at least a monthly basis, prepared by the person making the proposal, reviewed for its reasonableness by the trustee and signed by the trustee and the person making the proposal;
(b) a report on the reasonableness of the cash-flow statement, in the prescribed form, prepared and signed by the trustee; and
(c) a report containing prescribed representations by the person making the proposal regarding the preparation of the cash-flow statement, in the prescribed form, prepared and signed by the person making the proposal.
Marginal note:Creditors may obtain statement
(7) Subject to subsection (8), any creditor may obtain a copy of the cash-flow statement on request made to the trustee.
(8) The court may order that a cash-flow statement or any part thereof not be released to some or all of the creditors pursuant to subsection (7) where it is satisfied that
Marginal note:Trustee protected
(9) If the trustee acts in good faith and takes reasonable care in reviewing the cash-flow statement, he is not liable for loss or damage to any person resulting from that person’s reliance on the cash-flow statement.
Marginal note:Trustee to monitor and report
(10) Subject to any direction of the court under paragraph 47.1(2)(a), the trustee under a proposal in respect of an insolvent person shall, for the purpose of monitoring the insolvent person’s business and financial affairs, have access to and examine the insolvent person’s property, including his premises, books, records and other financial documents, to the extent necessary to adequately assess the insolvent person’s business and financial affairs, from the filing of the proposal until the proposal is approved by the court or the insolvent person becomes bankrupt, and shall
(a) file a report on the state of the insolvent person’s business and financial affairs — containing the prescribed information, if any —
(a.1) send a report about the material adverse change to the creditors without delay after ascertaining the change; and
(b) send, in the prescribed manner, a report on the state of the insolvent person’s business and financial affairs — containing the trustee’s opinion as to the reasonableness of a decision, if any, to include in a proposal a provision that sections 95 to 101 do not apply in respect of the proposal and containing the prescribed information, if any — to the creditors and the official receiver at least 10 days before the day on which the meeting of creditors referred to in subsection 51(1) is to be held.
Marginal note:Report to creditors
(11) An interim receiver who has been directed under subsection 47.1(2) to carry out the duties set out in subsection (10) in substitution for the trustee shall deliver a report on the state of the insolvent person’s business and financial affairs, containing any prescribed information, to the trustee at least fifteen days before the meeting of creditors referred to in subsection 51(1), and the trustee shall send the report to the creditors and the official receiver, in the prescribed manner, at least ten days before the meeting of creditors referred to in that subsection.
Marginal note:Court may declare proposal as deemed refused by creditors
(12) The court may, on application by the trustee, the interim receiver, if any, appointed under section 47.1 or a creditor, at any time before the meeting of creditors, declare that the proposal is deemed to have been refused by the creditors if the court is satisfied that
Marginal note:Effect of declaration
(12.1) If the court declares that the proposal is deemed to have been refused by the creditors, paragraphs 57(a) to (c) apply.
Marginal note:Claims against directors — compromise
(13) A proposal made in respect of a corporation may include in its terms provision for the compromise of claims against directors of the corporation that arose before the commencement of proceedings under this Act and that relate to the obligations of the corporation where the directors are by law liable in their capacity as directors for the payment of such obligations.
(14) A provision for the compromise of claims against directors may not include claims that
Marginal note:Powers of court
(15) The court may declare that a claim against directors shall not be compromised if it is satisfied that the compromise would not be just and equitable in the circumstances.
Marginal note:Application of other provisions
(16) Subsection 62(2) and section 122 apply, with such modifications as the circumstances require, in respect of claims against directors compromised under a proposal of a debtor corporation.
Marginal note:Determination of classes of claims
(17) The court, on application made at any time after a proposal is filed, may determine the classes of claims of claimants against directors and the class into which any particular claimant’s claim falls.
Marginal note:Resignation or removal of directors
(18) Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the corporation shall be deemed to be a director for the purposes of this section.
- R.S., 1985, c. B-3, s. 50
- 1992, c. 27, s. 18
- 1997, c. 12, s. 30
- 2001, c. 4, s. 27(E)
- 2004, c. 25, s. 32
- 2005, c. 47, s. 34
- 2007, c. 36, s. 16
- Date modified: