La Financière Nationale Inc.
What is a conservatory measure?
The Superintendent of Bankruptcy puts in place conservatory measures when a bankruptcy or insolvency estate needs protection. It might be in cases of Licensed Insolvency Trustee (LIT) malfeasance or if serious wrongdoing on the part of a LIT puts estate files at risk. Conservatory measures may also be put in place if a LIT becomes ill or dies without a valid succession agreement. Finally, conservatory measures may be put in place if a LIT, for whatever reason, has allowed the administration of his or her practice to become substandard.
In the matter of:
Pfeiffer & Pfeiffer Inc.
Sydney H. Pfeiffer
Instructions For Conservatory Measures
(section 14.03 of the Bankruptcy and Insolvency Act)
Whereas the Bankruptcy and Insolvency Act provides the Superintendent with the general power to supervise the administration of all estates and matters to which the Act applies;
Whereas Mr. Robert Massé, auditor, for the Office of the Superintendent of Bankruptcy, began a general audit of the trustee firm Pfeiffer & Pfeiffer Inc. on May 1st, 2002;
Whereas during the course of this audit and despite the trustee's lack of collaboration, Mr. Massé identified numerous irregularities in the trustee's practice, specifically that estate funds are not invested in authorized investment products, the interest is not distributed and/or paid to estate accounts in accordance with the Superintendent's Directives, fees have been withdrawn without proper authorization, the accounting system as used by the trustee does not meet the minimal standards imposed by the Superintendent's Directives, thereby not permitting an adequate evaluation of accounting data or of transactions performed within each estate, and consequently, making it impossible to render an opinion as to the proper administration of the estates;
Whereas, when questioned about these various irregularities, the trustee could not provide satisfactory explanations, he provided copies of bank documents which appeared to be incomplete and he refused to produce the originals of these documents, also not producing others documents pertaining to accounting and banking matters as requested by the auditor Robert Massé;
Whereas the delays, the lack of collaboration by the trustee and his refusal to produce documents requested by the auditor Robert Massé prevented Mr. Massé from continuing his audit of the trustee Pfeiffer & Pfeiffer Inc. causing him to leave the trustee's office on June 19, 2002;
Whereas Mr. Raymond Villemure, Assistant Superintendent Audit, required the trustee Pfeiffer & Pfeiffer Inc., by letter dated June 21, 2002 to produce various banking and accounting documents on or before June 26, 2002;
Whereas the trustees did not respond in a satisfactory manner to Mr. Raymond Villemure;
Whereas on July 5, 2002, for the above mentioned reasons and with a view to protecting the estates, the undersigned issued conservatory measures which enjoined financial institutions where, according to information given by the trustees, estate funds had been deposited to make no debit, payment or transfer on funds credited to the estates administered by the trustees unless they be co-signed by a representative of the Office of the Superintendent of Bankruptcy;
Whereas these measures also enjoined the Official Receiver to stop appointing the trustees to new files and also enjoined a representative of Industry Canada, to make a copy of the trustees' electronic data and accounting data related to the estates;
Whereas subsequent to the issuance of these conservatory measures, the investigation revealed that the trustees misled representatives of the Office of the Superintendent of Bankruptcy by making false statements and by knowingly providing incomplete, erroneous and false documents;
Whereas on July 15th, 2002, the trustees Pfeiffer & Pfeiffer Inc. and Sydney H. Pfeiffer were required to account for estates trust funds that they were presumably holding in a consolidated trust account;
Whereas the trustees were unable to account for a substantial part of the estates trust funds;
Whereas the Superintendent of Bankruptcy may and must, for the protection of an estate, exercise the powers referred to in subsection 14.03(1) of the Act in the circumstances stipulated in subsection 14.03(2) of the Act;
Whereas the Superintendent of Bankruptcy has delegated to the Deputy Superintendent (Policy, Programs and Standards, now Programs, Standards and Regulatory Affairs) in accordance with subsection 14.01(2) of the Act, in certain situations mentioned in subsection 14.03(2), his powers as specified at subsection 14.03 (1) of the Act, copies of which delegation are attached along with copies of subsections 14.01(2) and 14.03(1) to (4) of the Act ;
In accordance with paragraphs 14.03(1)b) and c) of the Bankruptcy and Insolvency Act;
I, Alain Lafontaine, in my capacity as Deputy Superintendent (Programs, Standards and Regulatory Affairs), give instruction to:
La Financière Nationale Inc., branch located at 1155, Metcalfe St, 23rd floor, Montreal, province of Quebec;
- to consider, upon reception of the present instruction, Michel Pelland and/or Robert Malo and/or Denis Hamel and/or Jacques Pesant of Samson Bélair Deloitte Touche Inc. trustee, as agents of the Office of the Superintendent of Bankruptcy, to be the only authorized signatories for any and all operations on the funds credited to the estates of bankruptcies and proposals administered by Pfeiffer & Pfeiffer Inc. and Sydney H. Pfeiffer;
- to make no debit and / or payment and /or transfers on funds credited to the estates of bankruptcies and proposals administered by Pfeiffer & Pfeiffer Inc., without having obtained the signature of Michel Pelland and/or Robert Malo and/or Denis Hamel and/or Jacques Pesant;
- not to pay, out of these accounts, bills of exchange, cheques, bank drafts or other such instruments that may have been issued before the reception of these instructions but which would be presented for payment after the receipt of these instructions, without these cheques, bills of exchange or drafts or other instruments being co-signed by Michel Pelland and/or Robert Malo and/or Denis Hamel and/or Jacques Pesant;
- to submit all statement of accounts, accepted cheques and/or other document and information having to do with the above mentioned estate accounts, to Michel Pelland and/or Robert Malo and/or Denis Hamel and/or Jacques Pesant;
- to provide, as soon as possible, the list of trust bank accounts of Pfeiffer & Pfeiffer Inc. and Sydney H. Pfeiffer to Michel Pelland and/or Robert Malo and/or Denis Hamel and/or Jacques Pesant.
This instruction replaces and revokes the one issued to you on July 5th, 2002.
These instructions take effect immediately and will stay in place until further notice or until a decision is rendered under section 14.01 of the Act;
In accordance with subsection 14.03(3) of the Act, these instructions bind the addressee, who must comply with them;
In accordance with subsection 14.03(4) of the Act, a person who complies with the present instructions is not liable for any act done by the person only to comply with them.
Signed, in the City of Ottawa, Ontario, July 24th, 2002
Deputy Superintendent (Programs, Standards and Regulatory Affairs)
- Date modified: