An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts (S.C. 2005, c. 47)
Full Document:
- HTMLFull Document: An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts (Accessibility Buttons available) |
- PDFFull Document: An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts [777 KB]
Assented to 2005-11-25
AMENDMENTS TO THE BANKRUPTCY AND INSOLVENCY ACT
15. Subsection 14.02(1) of the Act is replaced by the following:
Marginal note:Notice to trustee
14.02 (1) Before deciding whether to exercise any of the powers referred to in subsection 14.01(1), the Superintendent shall send the trustee written notice of the powers that the Superintendent may exercise and the reasons why they may be exercised and afford the trustee a reasonable opportunity for a hearing.
Marginal note:Subpoena or summons
(1.1) The Superintendent may, for the purpose of the hearing, issue a subpoena or other request or summons, requiring and commanding any person named in it
(a) to appear at the time and place mentioned in it;
(b) to testify to all matters within his or her knowledge relative to the subject-matter of the investigation into the conduct of the trustee; and
(c) to bring and produce any books, records, data, including data in electronic form, documents or papers in the person’s possession or under the person’s control relative to the subject-matter of the investigation.
Marginal note:Effect throughout Canada
(1.2) A person may be summoned from any part of Canada by virtue of a subpoena, request or summons issued under subsection (1.1).
Marginal note:Fees and allowances
(1.3) Any person summoned under subsection (1.1) is entitled to receive the like fees and allowances for so doing as if summoned to attend before the Federal Court.
16. (1) The portion of subsection 14.03(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Conservatory measures
14.03 (1) Subject to subsection (2), the Superintendent may, for the protection of an estate, the rights of the creditors or the debtor,
(2) Paragraph 14.03(2)(b) of the Act is replaced by the following:
(b) the Superintendent makes or causes to be made any inquiry or investigation under paragraph 5(3)(e);
(3) Paragraph 14.03(2)(f) of the Act is replaced by the following:
(f) a trustee has been found guilty of an indictable offence that, in the Superintendent’s opinion, is of a character that would impair the trustee’s capacity to perform the trustee’s fiduciary duties, or has failed to comply with any of the conditions or limitations to which the trustee’s licence is subject; or
17. Subsections 14.06(1.1) and (1.2) of the Act are replaced by the following:
Marginal note:Application
(1.1) In subsections (1.2) to (6), a reference to a trustee means a trustee in a bankruptcy or proposal and includes
(a) an interim receiver;
(b) a receiver within the meaning of subsection 243(2); and
(c) any other person who has been lawfully appointed to take, or has lawfully taken, possession or control of any property of an insolvent person or a bankrupt that was acquired for, or is used in relation to, a business carried on by the insolvent person or bankrupt.
Marginal note:Non-liability in respect of certain matters
(1.2) Despite anything in any federal or provincial law, if a trustee carries on in that position the business of the debtor or continues the employment of the debtor’s employees, the trustee is not by reason of that fact personally liable in respect of any claim against the debtor or related to a requirement imposed on the debtor to pay an amount if the claim is in relation to a debt or liability, present or future, to which the debtor is subject on the day on which the trustee is appointed.
18. Subsection 19(3) of the Act is repealed.
19. Section 21 of the Act is replaced by the following:
Marginal note:Verifying bankrupt’s statement of affairs
21. The trustee shall verify the bankrupt’s statement of affairs referred to in paragraph 158(d).
20. (1) Subsection 25(1) of the Act is replaced by the following:
Marginal note:Trust account
25. (1) When acting under the authority of this Act, a trustee shall, without delay, deposit in a bank all funds received for an estate in a separate trust account for each estate.
(2) Subsections 25(1.1) to (1.3) of the English version of the Act are replaced by the following:
Marginal note:Other deposit-taking institutions must be insured
(1.1) The trustee may deposit the funds in a deposit-taking institution, other than a bank as defined in section 2, only if deposits held by that institution are insured or guaranteed under a provincial or federal enactment that provides depositors with protection against the loss of funds on deposit with that institution.
Marginal note:Foreign funds
(1.2) If the funds are situated in a country other than Canada, the trustee may, if authorized by the Superintendent, deposit them in a financial institution in that country that is similar to a bank.
Marginal note:Permission needed for certain acts
(1.3) The trustee shall not withdraw any funds from the trust account of an estate without the permission in writing of the inspectors or, on application, the court, except for the payment of dividends and charges incidental to the administration of the estate.
(3) Section 25 of the Act is amended by adding the following after subsection (1.3):
Marginal note:Investments in government securities
(1.4) A trustee may, with the permission of the court, invest the funds in short-term securities of the Government of Canada or the government of a province held in trust for the estate.
(4) Subsection 25(3) of the Act is replaced by the following:
Marginal note:Not in private account
(3) The trustee shall not deposit any funds received by the trustee when acting under the authority of this Act in any banking account kept by the trustee for the trustee’s personal use.
21. The portion of subsection 28(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Documents to be forwarded to Superintendent
28. (1) The trustee shall, without delay after their receipt or preparation, send to the Superintendent, in the prescribed manner, true copies of the documents referred to in section 155 and a true copy of
22. Subsection 29(2) of the Act is repealed.
23. Section 30 of the Act is amended by adding the following after subsection (2):
Marginal note:If no inspectors
(3) If no inspectors are appointed, the trustee may do all or any of the things referred to in subsection (1).
Marginal note:Sale or disposal to related persons
(4) The trustee may sell or otherwise dispose of any of the bankrupt’s property to a person who is related to the bankrupt only with the court’s authorization.
Marginal note:Related persons
(5) For the purpose of subsection (4), in the case of a bankrupt other than an individual, a person who is related to the bankrupt includes a person who controls the bankrupt, a director or an officer of the bankrupt and a person who is related to a director or an officer of the bankrupt.
Marginal note:Factors to be considered
(6) In deciding whether to grant the authorization, the court must consider, among other things,
(a) whether the process leading to the proposed sale or disposal of the property was reasonable in the circumstances;
(b) the extent to which the creditors were consulted in respect of the proposed sale or disposal;
(c) the effects of the proposed sale or disposal on creditors and other interested parties;
(d) whether the consideration to be received for the property is reasonable and fair, taking into account the market value of the property;
(e) whether good faith efforts were made to sell or dispose of the property to persons who are not related to the bankrupt; and
(f) whether the consideration to be received is superior to the consideration that would be received under all other offers actually received in respect of the property.
24. Subsections 31(1) and (2) of the Act are replaced by the following:
Marginal note:Borrowing powers with permission of court
31. (1) With the permission of the court, an interim receiver, a receiver within the meaning of subsection 243(2) or a trustee may make necessary or advisable advances, incur obligations, borrow money and give security on the debtor’s property in any amount, on any terms and on any property that may be authorized by the court and those advances, obligations and money borrowed must be repaid out of the debtor’s property in priority to the creditors’ claims.
Marginal note:Security under Bank Act
(2) For the purpose of giving security under section 427 of the Bank Act, the interim receiver, receiver or trustee, when carrying on the business of the bankrupt, is deemed to be a person engaged in the class of business previously carried on by the bankrupt.
25. Section 33 of the Act is replaced by the following:
Marginal note:Reimbursement only of trustee’s disbursement advances
33. The court may make an order providing for the sale of any or all of the assets of the estate of the bankrupt, either by tender, private sale or public auction, setting out the terms and conditions of the sale and directing that the proceeds from the sale are to be used for the purpose of reimbursing the trustee in respect of any costs that may be owing to the trustee or of any moneys the trustee may have advanced as disbursements for the benefit of the estate.
26. Section 34 of the Act is amended by adding the following after subsection (2):
Marginal note:Notice to Superintendent’s division office
(3) The trustee must send notice to the Superintendent’s division office of the day and time when any application for directions made under subsection (1) is to be heard and of the day and time when the trustee intends to report to the court as required by the Superintendent under subsection (2).
27. Subsection 35(3) of the Act is replaced by the following:
Marginal note:Time limitation
(3) If a bankrupt is an individual, a notice referred to in subsection (1) is operative only during the three-month period immediately after the date of the bankruptcy unless the court, on application, extends that period on any terms that it considers fit.
28. Subsection 36(1) of the Act is replaced by the following:
Marginal note:Duty of former trustee on substitution
36. (1) On the appointment of a substituted trustee, the former trustee shall without delay pass his or her accounts before the court and deliver to the substituted trustee all the property of the estate, together with all books, records and documents of the bankrupt and of the administration of the estate, as well as a statement of receipts and disbursements that contains a complete account of all moneys received by the trustee out of the property of the bankrupt or otherwise, the amount of interest received by the trustee, all moneys disbursed and expenses incurred and the remuneration claimed by the trustee, together with full particulars, description and value of all the bankrupt’s property that has not been sold or realized, setting out the reason why the property has not been sold or realized and the disposition made of the property.
29. Subsection 40(1) of the Act is replaced by the following:
Marginal note:Disposal of unrealizable property
40. (1) Any property of a bankrupt that is listed in the statement of affairs referred to in paragraph 158(d) or otherwise disclosed to the trustee before the bankrupt’s discharge and that is found incapable of realization must be returned to the bankrupt before the trustee’s application for discharge, but if inspectors have been appointed, the trustee may do so only with their permission.
30. (1) Subsection 47(1) of the Act is replaced by the following:
Marginal note:Appointment of interim receiver
47. (1) If the court is satisfied that a notice is about to be sent or has been sent under subsection 244(1), it may, subject to subsection (3), appoint a trustee as interim receiver of all or any part of the debtor’s property that is subject to the security to which the notice relates until the earliest of
(a) the appointment of a receiver within the meaning of subsection 243(2) in respect of any of the debtor’s property,
(b) the filing of or making of an assignment by or in respect of the debtor,
(c) the granting of a bankruptcy order against the debtor,
(d) the filing of or making of a proposal by or in respect of the debtor,
(e) the filing of a notice of intention by the debtor, and
(f) the expiry of 60 days after the appointment, or any period specified by the court.
(2) Subsection 47(2) of the Act is amended by adding the word “and” at the end of paragraph (a), by striking out the word “and” at the end of paragraph (b) and by repealing paragraph (c).
31. (1) The portion of subsection 47.1(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Appointment of interim receiver
47.1 (1) If a notice of intention has been filed under section 50.4 or a proposal has been filed under subsection 62(1), the court may at any time after the filing, subject to subsection (3), appoint as interim receiver of all or any part of the debtor’s property,
(2) Section 47.1 of the Act is amended by adding the following after subsection (1):
Marginal note:Duration of appointment
(1.1) The appointment expires on the earliest of
(a) the appointment of a receiver within the meaning of subsection 243(2) in respect of any of the debtor’s property,
(b) the filing of or making of an assignment by or in respect of the debtor,
(c) the event that causes an assignment by the debtor to be deemed,
(d) the granting of a bankruptcy order against the debtor, and
(e) the day on which the court approves the proposal.
(3) Subsection 47.1(2) of the Act is amended by adding the word “and” at the end of paragraph (b), by striking out the word “and” at the end of paragraph (c) and by repealing paragraph (d).
32. Paragraph 47.2(3)(a) of the Act is replaced by the following:
(a) the form and content of their accounts, including their final statement of receipts and disbursements,
33. Subsection 49(2) of the Act is replaced by the following:
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.
34. (1) Subsection 50(2) of the Act is replaced by the following:
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,
(a) a copy of the proposal in writing setting out the terms of the proposal and the particulars of any securities or sureties proposed, signed by the person making the proposal and the proposed sureties if any; and
(b) the prescribed statement of affairs.
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.
(2) Paragraph 50(6)(a) of the Act is replaced by the following:
(a) a statement indicating, on a weekly basis, the projected cash-flow of the insolvent person (in this section referred to as the “cash-flow 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, 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;
(3) Subsection 50(10) of the Act is amended by striking out the word “and” at the end of paragraph (a) and by adding the following after paragraph (a):
(a.1) send a report about the material adverse change to the creditors without delay after ascertaining the change; and
(4) Section 50 of the Act is amended by adding the following after subsection (12):
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.
Page Details
- Date modified: