PART VICorporate Governance (continued)
Financial Statements and Auditors (continued)
Court-supervised Liquidation (continued)
Marginal note:Due diligence
354 A liquidator is not liable if they 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 bank represented to the liquidator by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or
(b) a report of a person whose profession lends credibility to a statement made by them.
- 1991, c. 46, s. 354
- 2005, c. 54, s. 78
Marginal note:Examination of others
355 (1) Where a liquidator has reason to believe that any property of the bank is in the possession or under the control of a person or that a person has concealed, withheld or misappropriated any such property, the liquidator may apply to the court for an order requiring that person to appear before the court at the time and place designated in the order and to be examined.
Marginal note:Restoration and compensation
(2) Where an examination conducted pursuant to subsection (1) discloses that a person has concealed, withheld or misappropriated any property of the bank, the court may order that person to restore the property or pay compensation to the liquidator.
Marginal note:Costs of liquidation
356 A liquidator shall pay the costs of liquidation out of the property of the bank and shall pay or make adequate provision for all claims against the bank.
Marginal note:Final accounts
(a) for approval of the final accounts of the liquidator and for an order permitting the distribution, in money or in kind, of the remaining property of the bank to its shareholders, or members, if any, or to the incorporators, according to their respective rights; or
(b) for an extension of time, setting out the reasons therefor.
Marginal note:Application by shareholder or member
(2) If a liquidator fails to make the application required by subsection (1), a shareholder of the bank or, if there are no shareholders of the bank, an incorporator — or, if the bank is a federal credit union, a member or shareholder of the federal credit union or, if there are no members or shareholders, an incorporator — may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.
Marginal note:Notification of final accounts
(3) A liquidator must give notice of their intention to make an application under subsection (1) to the Superintendent, to each inspector appointed under section 349, to each shareholder of the bank or, if there are no shareholders, to each incorporator and to any person who provided a security or fidelity bond for the liquidation. If the bank is a federal credit union, the liquidator must also give the notice to each member of the federal credit union.
(4) The liquidator shall publish the notice required under subsection (3) in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the bank has transacted any business within the preceding twelve months or as otherwise directed by the court.
- 1991, c. 46, s. 357
- 2010, c. 12, s. 2044
Marginal note:Final order
Marginal note:Delivery of order
(2) The liquidator shall forthwith send a certified copy of the order referred to in subsection (1) to the Superintendent.
Marginal note:Right to distribution of money
359 (1) If in the course of the liquidation of a bank that is not a federal credit union the shareholders resolve, or the liquidator proposes, to exchange all or substantially all of the remaining property of the bank for securities of another entity that are to be distributed to the shareholders or to the incorporators — or to distribute all or part of the remaining property of the bank to the shareholders or to the incorporators in kind — a shareholder or incorporator may apply to the court for an order requiring the distribution of the remaining property of the bank to be in money.
Marginal note:Right to distribution of money — federal credit union
(2) If in the course of the liquidation of a federal credit union the members resolve, or the liquidator proposes, to exchange all or substantially all of the remaining property of the federal credit union for securities of another entity that are to be distributed to the members or to members and shareholders — or to distribute all or part of the remaining property of the federal credit union to the members or to members and shareholders in kind — a member or shareholder may apply to the court for an order requiring the distribution of the remaining property of the federal credit union to be in money.
Marginal note:Powers of court
(3) On an application under subsection (1) or (2) , the court may order
Marginal note:Order by court
(4) If an order is made by a court under paragraph (3)(b), the court
(a) must fix a fair value on the share of the property of the bank attributable to the person;
(b) may in its discretion appoint one or more appraisers to assist the court in fixing a fair value in accordance with paragraph (a); and
(c) must render a final order against the bank in favour of the person for the amount of the share of the bank’s property attributable to the person.
- 1991, c. 46, s. 359
- 2010, c. 12, s. 2045
Marginal note:Dissolution by letters patent
Marginal note:Bank dissolved
(2) A bank in respect of which letters patent are issued under subsection (1) is dissolved and ceases to exist on the date of the issuance of the letters patent.
Definition of shareholder, member and incorporator
361 In sections 363 and 364, shareholder, member and incorporator include the heirs and personal representatives of a shareholder, member or incorporator, respectively.
- 1991, c. 46, s. 361
- 2010, c. 12, s. 2046
Marginal note:Continuation of actions
(a) a civil, criminal or administrative action or proceeding commenced by or against the bank before its dissolution may be continued as if the bank had not been dissolved;
(b) a civil, criminal or administrative action or proceeding may be brought against the bank within two years after its dissolution as if the bank had not been dissolved; and
(c) any property that would have been available to satisfy any judgment or order if the bank had not been dissolved remains available for that purpose.
Marginal note:Service on bank
(2) Service of a document on a bank after its dissolution may be effected by serving the document on a person shown as a director in the incorporating instrument of the bank or, if applicable, in the latest return sent to the Superintendent under section 632.
- 1991, c. 46, s. 362
- 1999, c. 28, s. 17
Marginal note:Limitations on liability
363 (1) Despite the dissolution of a bank, a shareholder, member or incorporator to whom any of its property has been distributed is liable to any person claiming under subsection 362(1) to the extent of the amount received by that shareholder, member or incorporator on the distribution.
(2) An action to enforce liability under subsection (1) may not be commenced except within two years after the date of the dissolution of the bank.
Marginal note:Action against class
(3) A court may order an action referred to in subsections (1) and (2) to be brought against the persons who were shareholders, members or incorporators as a class, subject to any conditions that the court thinks fit.
(4) If the plaintiff establishes a claim in an action under subsection (3), 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 person found by the plaintiff to have been a shareholder, member or incorporator;
(b) determine, subject to subsection (1), the amount that each person who was a shareholder, member or incorporator must contribute towards satisfaction of the plaintiff’s claim; and
(c) direct payment of the amounts so determined.
- 1991, c. 46, s. 363
- 2010, c. 12, s. 2047
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