PART 17Liquidation and Dissolution (continued)
Marginal note:Application to court
315 (1) An application to a court under subsection 313(1) must state the reasons, verified by an affidavit of the applicant, why the cooperative should be liquidated and dissolved.
Marginal note:Show cause order
(2) On an application under subsection 313(1), the court may make an order requiring the cooperative and any person who has an interest in it or claim against it to show cause, at a specified time and place, not less than four weeks after the date of the order, why the cooperative should not be liquidated and dissolved.
Marginal note:Powers of court
(3) On an application under subsection 313(1), the court may order the directors and officers of the cooperative to provide the court with all material information known to or reasonably ascertainable by them, including
(a) financial statements of the cooperative;
(b) the name and address of each member and shareholder; and
(c) the name and address of each known creditor or claimant, including any creditor or claimant with unliquidated, future or contingent claims, and any person with whom the cooperative has a contract.
(4) A copy of an order made under subsection (2) must be
(a) published as directed in the order, at least once in each week before the time appointed for the hearing, in a publication generally available to the public; and
(b) served on the Director and each person named in the order.
Marginal note:Person responsible
(5) Publication and service of an order under this section must be effected by the cooperative or by any other person and in any manner that the court may order.
- 1998, c. 1, s. 315
- 2018, c. 8, s. 81(F)
Marginal note:Powers of court
316 In connection with the liquidation and dissolution of a cooperative, the court may, if it is satisfied that the cooperative is able to pay or adequately provide for the discharge of all its obligations, make any order it thinks fit, including an order
(a) to liquidate;
(b) appointing a liquidator, with or without security, and fixing their remuneration, or replacing a liquidator;
(c) appointing inspectors or referees, specifying their powers and fixing their remuneration, or replacing inspectors or referees;
(d) determining the notice to be given to any interested person, or dispensing with notice to any person;
(e) determining the validity of any claim made against the cooperative;
(f) at any stage of the proceedings, restraining the directors and officers from
(i) exercising any of their powers, or
(ii) collecting or receiving any debt or other property of the cooperative, and from paying out or transferring any property of the cooperative, except as permitted by the court;
(g) determining and enforcing the duty or liability of any present or former director, officer, member or shareholder
(i) to the cooperative, or
(ii) for an obligation of the cooperative;
(h) approving the payment, satisfaction or compromise of claims against the cooperative and the retention of assets for those purposes, and determining the adequacy of provisions for the payment or discharge of obligations of the cooperative, whether liquidated, unliquidated, future or contingent;
(i) disposing of or destroying documents and records of the cooperative;
(j) on the application of a creditor, the inspectors or the liquidator, giving directions on any matter arising on the liquidation;
(k) after notice has been given to all interested parties, relieving a liquidator from an omission or default on any terms that the court thinks fit and confirming any act of the liquidator;
(l) subject to section 322, approving any proposed interim or final distribution to members or shareholders in money or in property in accordance with their respective rights;
(m) disposing of any property that belongs to creditors, members or shareholders who cannot be found;
(n) on the application of a director, officer, member, shareholder or creditor or the liquidator,
(i) staying the liquidation on any terms and conditions that the court thinks fit,
(ii) continuing or discontinuing the liquidation proceedings, or
(iii) to the liquidator, to restore to the cooperative all its remaining property; and
(o) after the liquidator has rendered a final account to the court, dissolving the cooperative.
- 1998, c. 1, s. 316
- 2011, c. 21, s. 108(F)
Marginal note:Effect of order
317 The liquidation of a cooperative commences when a court makes an order for liquidation.
Marginal note:Cessation of business and powers
318 (1) If a court makes an order for liquidation of a cooperative,
(a) the cooperative continues in existence but must cease to carry on business, except the business that is in the liquidator’s opinion required for an orderly liquidation; and
(b) the powers of the directors, members and shareholders cease and vest in the liquidator, except as specifically authorized by the court.
Marginal note:Delegation by liquidator
(2) The liquidator may delegate any of the powers vested in him or her by paragraph (1)(b) to the directors or members.
Marginal note:Appointment of liquidator
319 (1) When making an order for the liquidation of a cooperative or at any time after making one, the court may appoint any person, including a director, officer, member or shareholder, or any other body corporate, as liquidator of the cooperative.
(2) If an order for the liquidation of a cooperative has been made and the office of liquidator is or becomes vacant, the property of the cooperative is under the control of the court until the office of liquidator is filled.
Marginal note:Duties of liquidator
320 A liquidator must, without delay after being appointed,
(a) give notice of appointment to each claimant and creditor known to the liquidator;
(b) publish notice in a publication generally available to the public and take reasonable steps to give notice of the appointment in each province or other jurisdiction where the cooperative carries on business, requiring
(i) any person who is indebted to the cooperative to render an account and pay any amount owing to the liquidator at the time and place specified,
(ii) any person who possesses property of the cooperative to deliver it to the liquidator at the time and place specified, and
(iii) any person who has a claim against the cooperative, whether liquidated, unliquidated, future or contingent, to present particulars of it in writing to the liquidator not later than two months after the first publication of the notice;
(c) take the property of the cooperative into custody and control;
(d) open and maintain a trust account for money received by the liquidator in the course of the liquidation;
(e) keep accounts of the moneys of the cooperative received and paid out in the course of the liquidation;
(f) maintain separate lists of the members, shareholders and creditors and other persons who have claims against the cooperative;
(g) if at any time the liquidator determines that the cooperative 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 Director, at least once in every twelve month period after appointment or more often as the court may require, financial statements of the cooperative in the form required by section 247, or in any other form that the liquidator may think proper or that the court may require; and
(i) after the final accounts are approved by the court, distribute any remaining property of the cooperative among the members and shareholders according to their respective rights.
- 1998, c. 1, s. 320
- 2018, c. 8, s. 82(F)
Marginal note:Powers of liquidator
321 (1) A liquidator may
(a) retain lawyers, notaries, accountants, engineers, appraisers and other professionals;
(b) bring, defend or take part in any civil, criminal, administrative, investigative or other action or proceeding in the name and on behalf of the cooperative;
(c) carry on the business of the cooperative as required for an orderly liquidation;
(d) sell any property of the cooperative by public auction or private sale;
(e) do all acts and execute or, in Quebec, sign any documents in the name and on behalf of the cooperative;
(f) borrow money on the security of the property of the cooperative;
(g) settle or compromise any claims by or against the cooperative; and
(h) do all other things necessary for the liquidation of the cooperative and the distribution of its property.
Marginal note:Due diligence
(2) A liquidator is not liable under this Part if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the cooperative represented to the liquidator by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or
(b) a report of a person whose profession lends credibility to a statement made by the professional person.
Marginal note:Application to court
(3) If a liquidator has reason to believe that any property of the cooperative is in the possession or control of a person or that anyone has concealed, withheld or misappropriated any property of the cooperative, the liquidator may apply to the court for an order requiring the person to appear before the court at the time and place designated in the order and to be examined.
Marginal note:Power of court
(4) If the examination discloses that the person has concealed, withheld or misappropriated property of the cooperative, the court may order the person to restore it or pay compensation to the liquidator.
- 1998, c. 1, s. 321
- 2001, c. 14, s. 214
- 2011, c. 21, s. 109(E)
Marginal note:Costs of liquidation
322 (1) A liquidator must pay the costs of liquidation out of the property of the cooperative and must pay or make adequate provision for all claims against it.
Marginal note:Final accounts
(2) No later than one year after appointment, and after paying or making adequate provision for all claims against the cooperative, the liquidator must apply to the court for
(a) approval of the final accounts of the liquidator and, subject to the articles and Parts 20 and 21, an order permitting a distribution in money or in kind of the remaining property of the cooperative to the members and shareholders, if any, according to their respective rights; or
(b) an extension of time, setting out the reasons for the extension.
(3) If a liquidator fails to make the application required by subsection (2), a member or shareholder may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.
(4) A liquidator must give notice of their intention to make an application under subsection (2) to the Director, to each inspector appointed under section 316, to each member or shareholder and to any person who provided a security, a fidelity bond or fidelity insurance for the liquidation, and must publish the notice in a newspaper published or distributed in the place where the cooperative has its registered office, in any manner set out in the by-laws or as otherwise directed by the court.
Marginal note:Final order
(5) If the court approves the final accounts rendered by a liquidator, the court must make an order
(a) directing the Director to issue a certificate of dissolution;
(b) directing the custody or disposal of the documents of the cooperative; and
(c) discharging the liquidator, subject to the remaining duty required by subsection (6).
Marginal note:Delivery of order
(6) The liquidator must send a certified copy of the order described in subsection (5) to the Director without delay.
Marginal note:Certificate of dissolution
(7) On receipt of the order described in subsection (5), the Director must issue a certificate of dissolution.
Marginal note:Effect of certificate
(8) The cooperative ceases to exist on the date shown in the certificate of dissolution.
- 1998, c. 1, s. 322
- 2011, c. 21, s. 110(E)
Marginal note:Right to distribution in money
323 A member or shareholder may apply to the court for an order requiring the distribution of the property of the cooperative to be in money if, in the course of the liquidation of the cooperative, the members and shareholders resolve or the liquidator proposes to
(a) exchange all or substantially all the property of the cooperative for securities of another body corporate that are to be distributed to the members and shareholders, if any; or
(b) distribute all or part of the property of the cooperative to the members and shareholders, if any, in kind.
Marginal note:Powers of court
324 On an application under section 323, the court, subject to the articles and Parts 20 and 21, may order
(a) that all the property of the cooperative be converted into and distributed in money; or
(b) that the claims of a member or shareholder applying under this section be satisfied by a distribution in money, in which case subsections 302(19) and (20) apply.
Marginal note:Custody of records
325 A person who has been granted custody of the documents of a dissolved cooperative remains liable to produce them for six years after the date of its dissolution or until the end of any other shorter period that may be ordered under subsection 322(5).
Marginal note:Heirs and representatives
326 (1) In this section, “member” and “shareholder” include their heirs and personal representatives.
Marginal note:Continuation of actions
(2) Despite the dissolution of a cooperative under this Act,
(a) a civil, criminal, administrative, investigative or other action or proceeding commenced by or against the cooperative before its dissolution may be continued as if it had not been dissolved;
(b) a civil, criminal, administrative, investigative or other action or proceeding may be brought against the cooperative within two years after its dissolution as if it had not been dissolved; and
(c) any property that would have been available to satisfy a judgment or order if the cooperative had not been dissolved remains available for those purposes.
(3) Service of a document on a cooperative after its dissolution may be effected by serving the document on a person named in the last notice sent under section 81 or 91.
(4) Despite the dissolution of a cooperative under this Act, a member or shareholder to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount distributed to that member or shareholder. An action to enforce the liability may be brought no later than two years after the date of the dissolution of the cooperative.
Marginal note:Representative action
(5) A court may order an action referred to in subsection (4) to be brought against the persons who were members or shareholders as a class, subject to any conditions that the court thinks fit, and, if the plaintiff establishes a claim, the court may refer the proceedings to a referee or other officer of the court who may
(a) add as a party to the proceedings each member or shareholder who was found by the plaintiff;
(b) determine, subject to subsection (4), the amount that each of those members and shareholders must contribute towards satisfaction of the plaintiff’s claim; and
(c) direct payment of the amounts so determined.
- 1998, c. 1, s. 326
- 2001, c. 14, s. 215
- 2011, c. 21, s. 111(F)
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