Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)

Marginal note:Trustee to consult customer compensation body

264 Where the accounts of customers of a securities firm are protected, in whole or in part, by a customer compensation body, the trustee shall consult the customer compensation body on the administration of the bankruptcy, and the customer compensation body may designate an inspector to act on its behalf.

Marginal note:Late claims

265 A customer may prove a claim after the distribution of cash and securities in the customer pool fund and is entitled to receive cash and securities in the hands of the trustee at the time the claim is proven up to the appropriate portion of the customer’s net equity before further distribution is made to other customers, but no such claim shall affect the previous distribution of the customer pool fund or the general fund.

Accounting of Trustee

Marginal note:Statement of trustee required

266 In addition to any other statement or report required to be prepared under this Act, a trustee shall prepare

• (a) a statement indicating

  • (i) the distribution of property in the customer pool fund among customers who have proved their claims, and

  • (ii) the disposal of customer name securities; or

• (b) such other report relating to that distribution or disposal as the court may direct.

PART XIIICross-border Insolvencies

Purpose

Marginal note:Purpose

267 The purpose of this Part is to provide mechanisms for dealing with cases of cross-border insolvencies and to promote

• (a) cooperation between the courts and other competent authorities in Canada with those of foreign jurisdictions in cases of cross-border insolvencies;

• (b) greater legal certainty for trade and investment;

• (c) the fair and efficient administration of cross-border insolvencies that protects the interests of creditors and other interested persons, and those of debtors;

• (d) the protection and the maximization of the value of debtors’ property; and

• (e) the rescue of financially troubled businesses to protect investment and preserve employment.

Interpretation

Marginal note:Definitions

• 268 (1) The following definitions apply in this Part.

  foreign court

  foreign court means a judicial or other authority competent to control or supervise a foreign proceeding. (tribunal étranger)

  foreign main proceeding

  foreign main proceeding means a foreign proceeding in a jurisdiction where the debtor has the centre of the debtor’s main interests. (principale)

  foreign non-main proceeding

  foreign non-main proceeding means a foreign proceeding, other than a foreign main proceeding. (secondaire)

  foreign proceeding

  foreign proceeding means a judicial or an administrative proceeding, including an interim proceeding, in a jurisdiction outside Canada dealing with creditor’s collective interests generally under any law relating to bankruptcy or insolvency in which a debtor’s property and affairs are subject to control or supervision by a foreign court for the purpose of reorganization or liquidation. (instances étrangères)

  foreign representative

  foreign representative means a person or body, including one appointed on an interim basis, who is authorized, in a foreign proceeding in respect of a debtor, to

  • (a) administer the debtor’s property or affairs for the purpose of reorganization or liquidation; or

  • (b) act as a representative in respect of the foreign proceeding. (représentant étranger)

• Marginal note:Centre of debtor’s main interests

  (2) For the purposes of this Part, in the absence of proof to the contrary, a debtor’s registered office and, in the case of a debtor who is an individual, the debtor’s ordinary place of residence are deemed to be the centre of the debtor’s main interests.

Recognition of Foreign Proceeding

Marginal note:Application for recognition of a foreign proceeding

• 269 (1) A foreign representative may apply to the court for recognition of the foreign proceeding in respect of which he or she is a foreign representative.

• Marginal note:Documents that must accompany application

  (2) Subject to subsection (3), the application must be accompanied by

  • (a) a certified copy of the instrument, however designated, that commenced the foreign proceeding or a certificate from the foreign court affirming the existence of the foreign proceeding;

  • (b) a certified copy of the instrument, however designated, authorizing the foreign representative to act in that capacity or a certificate from the foreign court affirming the foreign representative’s authority to act in that capacity; and

  • (c) a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative.

• Marginal note:Documents may be considered as proof

  (3) The court may, without further proof, accept the documents referred to in paragraphs (2)(a) and (b) as evidence that the proceeding to which they relate is a foreign proceeding and that the applicant is a foreign representative in respect of the foreign proceeding.

• Marginal note:Other evidence

  (4) In the absence of the documents referred to in paragraphs (2)(a) and (b), the court may accept any other evidence of the existence of the foreign proceeding and of the foreign representative’s authority that it considers appropriate.

• Marginal note:Translation

  (5) The court may require a translation of any document accompanying the application.

Marginal note:Order recognizing foreign proceeding

• 270 (1) If the court is satisfied that the application for the recognition of a foreign proceeding relates to a foreign proceeding and that the applicant is a foreign representative in respect of that foreign proceeding, the court shall make an order recognizing the foreign proceeding.

• Marginal note:Nature of foreign proceeding to be specified

  (2) The court shall specify in the order whether the foreign proceeding is a foreign main proceeding or a foreign non-main proceeding.

Marginal note:Effects of recognition of a foreign main proceeding

• 271 (1) Subject to subsections (2) to (4), on the making of an order recognizing a foreign proceeding that is specified to be a foreign main proceeding,

  • (a) no person shall commence or continue any action, execution or other proceedings concerning the debtor’s property, debts, liabilities or obligations;

  • (b) if the debtor carries on a business, the debtor shall not, outside the ordinary course of the business, sell or otherwise dispose of any of the debtor’s property in Canada that relates to the business and shall not sell or otherwise dispose of any other property of the debtor in Canada; and

  • (c) if the debtor is an individual, the debtor shall not sell or otherwise dispose of any property of the debtor in Canada.

• Marginal note:When subsection (1) does not apply

  (2) Subsection (1) does not apply if any proceedings under this Act have been commenced in respect of the debtor at the time the order recognizing the foreign proceeding is made.

• Marginal note:Exceptions

  (3) The prohibitions in paragraphs (1)(a) and (b) are subject to the exceptions specified by the court in the order recognizing the foreign proceeding that would apply in Canada had the foreign proceeding taken place in Canada under this Act.

• Marginal note:Application of this and other Acts

  (4) Nothing in subsection (1) precludes the commencement or the continuation of proceedings under this Act, the Companies’ Creditors Arrangement Act or the Winding-up and Restructuring Act in respect of the debtor.

Marginal note:Orders

• 272 (1) If an order recognizing a foreign proceeding is made, the court may, on application by the foreign representative who applied for the order, if the court is satisfied that it is necessary for the protection of the debtor’s property or the interests of a creditor or creditors, make any order that it considers appropriate, including an order

  • (a) if the foreign proceeding is a foreign non-main proceeding, imposing the prohibitions referred to in paragraphs 271(1)(a) to (c) and specifying the exceptions to those prohibitions, taking subsection 271(3) into account;

  • (b) respecting the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor’s property, affairs, debts, liabilities and obligations;

  • (c) entrusting the administration or realization of all or part of the debtor’s property located in Canada to the foreign representative or to any other person designated by the court; and

  • (d) appointing a trustee as receiver of all or any part of the debtor’s property in Canada, for any term that the court considers appropriate and directing the receiver to do all or any of the following, namely,

    • (i) to take possession of all or part of the debtor’s property specified in the appointment and to exercise the control over the property and over the debtor’s business that the court considers appropriate, and

    • (ii) to take any other action that the court considers appropriate.

• Marginal note:Restriction

  (2) If any proceedings under this Act have been commenced in respect of the debtor at the time an order recognizing the foreign proceeding is made, an order made under subsection (1) must be consistent with any order that may be made in any proceedings under this Act.

• Marginal note:Application of this and other Acts

  (3) The making of an order under paragraph (1)(a) does not preclude the commencement or the continuation of proceedings under this Act, the Companies’ Creditors Arrangement Act or the Winding-up and Restructuring Act in respect of the debtor.

Marginal note:Terms and conditions of orders

273 An order under this Part may be made on any terms and conditions that the court considers appropriate in the circumstances.

Marginal note:Commencement or continuation of proceedings

274 If an order recognizing a foreign proceeding is made, the foreign representative may commence or continue any proceedings under sections 43, 46 to 47.1 and 49 and subsections 50(1) and 50.4(1) in respect of a debtor as if the foreign representative were a creditor of the debtor, or the debtor, as the case may be.

Obligations

Marginal note:Cooperation — court

• 275 (1) If an order recognizing a foreign proceeding is made, the court shall cooperate, to the maximum extent possible, with the foreign representative and the foreign court involved in the foreign proceeding.

• Marginal note:Cooperation — other authorities in Canada

  (2) If any proceedings under this Act have been commenced in respect of a debtor and an order recognizing a foreign proceeding is made in respect of the debtor, every person who exercises any powers or performs duties and functions in any proceedings under this Act shall cooperate, to the maximum extent possible, with the foreign representative and the foreign court involved in the foreign proceeding.

• Marginal note:Forms of cooperation

  (3) For the purpose of this section, cooperation may be provided by any appropriate means, including

  • (a) the appointment of a person to act at the direction of the court;

  • (b) the communication of information by any means considered appropriate by the court;

  • (c) the coordination of the administration and supervision of the debtor’s assets and affairs;

  • (d) the approval or implementation by courts of agreements concerning the coordination of proceedings; and

  • (e) the coordination of concurrent proceedings regarding the same debtor.

Marginal note:Obligations of foreign representative

276 If an order recognizing a foreign proceeding is made, the foreign representative who applied for the order shall

• (a) without delay, inform the court of

  • (i) any substantial change in the status of the recognized foreign proceeding,

  • (ii) any substantial change in the status of the foreign representative’s authority to act in that capacity, and

  • (iii) any other foreign proceeding in respect of the same debtor that becomes known to the foreign representative; and

• (b) publish, without delay after the order is made, once a week for two consecutive weeks, or as otherwise directed by the court, in one or more newspapers in Canada specified by the court, a notice containing the prescribed information.

Multiple Proceedings

Marginal note:Concurrent proceedings

277 If any proceedings under this Act in respect of a debtor are commenced at any time after an order recognizing the foreign proceeding is made,

• (a) the court shall review any order made under section 272 and, if it determines that the order is inconsistent with any orders made in the proceedings under this Act, the court shall amend or revoke the order; and

• (b) if the foreign proceeding is a foreign main proceeding, the court shall make an order terminating the application of the prohibitions in paragraphs 271(1)(a) to (c) if the court determines that those prohibitions are inconsistent with any similar prohibitions imposed in the proceedings under this Act.

Marginal note:Multiple foreign proceedings

• 278 (1) If, at any time after an order is made in respect of a foreign non-main proceeding in respect of a debtor, an order recognizing a foreign main proceeding is made in respect of the debtor, the court shall review any order made under section 272 in respect of the foreign non-main proceeding and, if it determines that the order is inconsistent with any orders made under that section in respect of the foreign main proceedings, the court shall amend or revoke the order.

• Marginal note:Multiple foreign proceedings

  (2) If, at any time after an order is made in respect of a foreign non-main proceeding in respect of the debtor, an order recognizing another foreign non-main proceeding is made in respect of the debtor, the court shall, for the purpose of facilitating the coordination of the foreign non-main proceedings, review any order made under section 272 in respect of the first recognized proceeding and amend or revoke that order if it considers it appropriate.