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Canada Business Corporations Act (R.S.C., 1985, c. C-44)

Act current to 2019-06-20 and last amended on 2019-06-13. Previous Versions

PART VIIITrust Indentures (continued)

Marginal note:Evidence of compliance

  •  (1) An issuer or a guarantor of debt obligations issued or to be issued under a trust indenture shall, before doing any act under paragraph (a), (b) or (c), furnish the trustee with evidence of compliance with the conditions in the trust indenture relating to

    • (a) the issue, certification and delivery of debt obligations under the trust indenture;

    • (b) the release or release and substitution of property subject to a security interest constituted by the trust indenture; or

    • (c) the satisfaction and discharge of the trust indenture.

  • Marginal note:Duty of issuer or guarantor

    (2) On the demand of a trustee, the issuer or guarantor of debt obligations issued or to be issued under a trust indenture shall furnish the trustee with evidence of compliance with the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.

  • 1974-75-76, c. 33, s. 81
  • 1978-79, c. 9, s. 1(F)

Marginal note:Contents of declaration, etc.

 Evidence of compliance as required by section 86 shall consist of

  • (a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in that section have been complied with; and

  • (b) where the trust indenture requires compliance with conditions that are subject to review

    • (i) by legal counsel, an opinion of legal counsel that such conditions have been complied with, and

    • (ii) by an auditor or accountant, an opinion or report of the auditor of the issuer or guarantor, or such other accountant as the trustee may select, that such conditions have been complied with.

  • 1974-75-76, c. 33, s. 82
  • 1978-79, c. 9, s. 1(F)

Marginal note:Further evidence of compliance

 The evidence of compliance referred to in section 87 shall include a statement by the person giving the evidence

  • (a) declaring that they have read and understand the conditions of the trust indenture described in section 86;

  • (b) describing the nature and scope of the examination or investigation on which the certificate, statement or opinion is based; and

  • (c) declaring that they have made the examination or investigation that they believe necessary to enable them to make their statements or give their opinions.

  • R.S., 1985, c. C-44, s. 88
  • 2001, c. 14, s. 135(E)

Marginal note:Trustee may require evidence of compliance

  •  (1) On the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall furnish the trustee with evidence in such form as the trustee may require as to compliance with any condition thereto relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture.

  • Marginal note:Certificate of compliance

    (2) At least once in each twelve month period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall furnish the trustee with a certificate that the issuer or guarantor has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars thereof.

  • 1974-75-76, c. 33, s. 84
  • 1978-79, c. 9, s. 1(F)

Marginal note:Notice of default

 The trustee shall give to the holders of debt obligations issued under a trust indenture, within thirty days after the trustee becomes aware of the occurrence thereof, notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee reasonably believes that it is in the best interests of the holders of the debt obligations to withhold such notice and so informs the issuer and guarantor in writing.

  • 1974-75-76, c. 33, s. 85
  • 1978-79, c. 9, s. 1(F)

Marginal note:Duty of care

 A trustee in exercising their powers and discharging their duties shall

  • (a) act honestly and in good faith with a view to the best interests of the holders of the debt obligations issued under the trust indenture; and

  • (b) exercise the care, diligence and skill of a reasonably prudent trustee.

  • R.S., 1985, c. C-44, s. 91
  • 2001, c. 14, s. 135(E)

Marginal note:Reliance on statements

 Notwithstanding section 91, a trustee is not liable if they rely in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

  • R.S., 1985, c. C-44, s. 92
  • 2001, c. 14, s. 135(E)

Marginal note:No exculpation

 No term of a trust indenture or of any agreement between a trustee and the holders of debt obligations issued thereunder or between the trustee and the issuer or guarantor shall operate so as to relieve a trustee from the duties imposed on the trustee by section 91.

  • R.S., 1985, c. C-44, s. 93
  • 2001, c. 14, s. 135(E)

PART IXReceivers, Receiver-managers and Sequestrators

Marginal note:Functions of receiver or sequestrator

 A receiver or sequestrator of any property of a corporation may, subject to the rights of secured creditors, receive the income from the property, pay the liabilities connected with the property and realize the security interest of those on behalf of whom the receiver or sequestrator is appointed, but, except to the extent permitted by a court, the receiver or sequestrator may not carry on the business of the corporation.

  • R.S., 1985, c. C-44, s. 94
  • 2001, c. 14, s. 135(E)
  • 2011, c. 21, s. 44(E)

Marginal note:Functions of receiver-manager

 A receiver-manager of the corporation may carry on any business of the corporation to protect the security interest of those on behalf of whom the receiver-manager is appointed.

  • R.S., 1985, c. C-44, s. 95
  • 2001, c. 14, s. 135(E)
  • 2011, c. 21, s. 45

Marginal note:Directors’ powers cease

 If a receiver-manager or sequestrator is appointed by a court or under an instrument or act, the powers of the directors of the corporation that the receiver-manager or sequestrator is authorized to exercise may not be exercised by the directors until the receiver-manager or sequestrator is discharged.

  • R.S., 1985, c. C-44, s. 96
  • 2011, c. 21, s. 45

Marginal note:Duty to act

 A receiver, receiver-manager or sequestrator appointed by a court shall act in accordance with the directions of the court.

  • R.S., 1985, c. C-44, s. 97
  • 2011, c. 21, s. 46(E)

Marginal note:Duty under instrument or act

 A receiver, receiver-manager or sequestrator appointed under an instrument or act shall act in accordance with that instrument or act and any direction of a court made under section 100.

  • R.S., 1985, c. C-44, s. 98
  • 2011, c. 21, s. 46(E)

Marginal note:Duty of care

 A receiver, receiver-manager or sequestrator of a corporation appointed under an instrument or act shall

  • (a) act honestly and in good faith; and

  • (b) deal with any property of the corporation in their possession or control in a commercially reasonable manner.

  • R.S., 1985, c. C-44, s. 99
  • 2001, c. 14, s. 135(E)
  • 2011, c. 21, s. 47(E)

Marginal note:Directions given by court

 On an application by a receiver, receiver-manager or sequestrator, whether appointed by a court or under an instrument or act, or on an application by any interested person, a court may make any order it thinks fit including, without limiting the generality of the foregoing,

  • (a) an order appointing, replacing or discharging a receiver, receiver-manager or sequestrator and approving their accounts;

  • (b) an order determining the notice to be given to any person or dispensing with notice to any person;

  • (c) an order fixing the remuneration of the receiver, receiver-manager or sequestrator;

  • (d) an order requiring the receiver, receiver-manager or sequestrator, or a person by or on behalf of whom the receiver, receiver-manager or sequestrator is appointed, to make good any default in connection with the receiver’s, receiver-manager’s or sequestrator’s custody or management of the property and business of the corporation, or to relieve any such person from any default on any terms that the court thinks fit, and to confirm any act of the receiver, receiver-manager or sequestrator; and

  • (e) an order giving directions on any matter relating to the duties of the receiver, receiver-manager or sequestrator.

  • R.S., 1985, c. C-44, s. 100
  • 2001, c. 14, s. 135(E)
  • 2011, c. 21, s. 48(E)
 
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