The Royal Bank of Canada and CIBC

Conservatory Measures

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.

Canada

In the matter of:
John Brock Hobbs
Hobbs and Company


Directions for Conservatory Measures
(Section 14.03 of the Bankruptcy and Insolvency Act)


Whereas the Bankruptcy and Insolvency Act (the Act) provides the Superintendent of Bankruptcy (the Superintendent) with the general power to supervise the administration of all estates and matters to which the Act applies;

Whereas John Brock Hobbs is the holder of an individual license as trustee in bankruptcy;

Whereas Hobbs and Company is the holder of a corporate trustee license;

Whereas an investigation made by the Superintendent pursuant to section 5(3)(e) of the Act revealed that John Brock Hobbs had an unacceptably high number of estate files under administration for more than three years as well as banking deficiencies in the administration of his estates;

Whereas on July 23rd, 2003 the Division Assistant Superintendent (DAS), Hamilton Division Office, Office of the Superintendent of Bankruptcy (OSB), and a Senior Bankruptcy Analyst (SBA) met with John Brock Hobbs to discuss the closing plan to be submitted by the trustee under the Initiative for the Orderly and Timely Administration of Files (IOTA);

Whereas during this meeting, the trustee signed his closing plan which provided that he would be closing 22 files per month;

Whereas on September 10, 2003 the DAS of the Hamilton Division Office, and the SBA met again with John Brock Hobbs to discuss matters pertaining to IOTA and more specifically having to do with the trustee's deficiencies in banking, in particular issues dealing with the reconciliation of consolidated trust accounts;

Whereas from that time until today, the SBA met with the trustee on October 24, November 28, December 17, 2003 as well as on March 9, April 22 and June 11, 2004 to follow up on the progress of the trustee as well as to discuss either of these two matters;

Whereas as of today and notwithstanding repeated communication between the SBA and the trustee on this issue, the trustee has not complied with his closing plan under Initiative for the Orderly and Timely Administration;

Whereas I believe on reasonable grounds that the estates require protection;

Whereas the Superintendent may, for the protection of an estate, exercise the powers set out in subsection 14.03(1) of the Act, in the circumstances referred to in subsection 14.03(2) of the Act;

Whereas the Superintendent has delegated to me, in accordance with subsection 14.01(2) of the Act, the powers of the Superintendent as specified at subsection 14.03(1) of the Act, in the circumstance referred to in paragraph 14.03(2)(b), a copy of which delegation is attached, along with copies of sections 14.01, 14.02 and 14.03 of the Act;

Whereas paragraphs 14.03(1)(b) and (c) of the Act apply;

I, the undersigned, Karl Bueckert, Senior Bankruptcy Analyst, in my capacity as delegate for the Superintendent of Bankruptcy, direct:

  • Royal Bank of Canada, Airport & Stockdale Branch, 925 Stockdale Road, Main Floor, North Bay, Ontario, P1B 9N5, trust account numbers: 200-100-6, 200-101-4, 200-133-7;
  • CIBC, 4821 Yonge Street, North York, Ontario, M2N 5X2, consolidated trust account number 46-07813;
  • CIBC, 4821 Yonge Street, North York, Ontario, M2N 5X2, consolidated proposal trust account number 46-07910;

  1. to consider, upon receipt of the present directions Murray Ferron and Janet Russell, employees of the Office of the Superintendent of Bankruptcy, as the only two authorized co-signatories as relates to any operations on the funds credited to the estates of bankruptcies and proposals administered by John Brock Hobbs and Hobbs and Company;
  2. to make no debit and/or payment and/or transfers on funds credited or ought to have been credited to the estates of bankruptcies and proposals administered by John Brock Hobbs and Hobbs and Company without the countersignature of Murray Ferron or Janet Russell;
  3. to not pay, out of these accounts, cheques, bills of exchange, bank drafts or other instruments, issued before the receipt of these directions which are presented for payment after the receipt of these directions without these cheques, bills of exchange or drafts or other instruments being countersigned by Murray Ferron or Janet Russell;
  4. to submit all statement of accounts, accepted cheques and/or other document and information having to do with the above mentioned estate accounts, to the DAS;
  5. to provide, as soon as possible, the list of trust bank accounts of John Brock Hobbs and Hobbs and Company to the Acting DAS of the Hamilton Division office;

These directions take effect immediately and will stay in place until such time as I am satisfied the estates no longer need protection.

In accordance with subsection 14.03(3) of the Act, these directions 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 directions is not liable for any act done by the person only to comply with them.

Signed, in the City of Saskatoon, Saskatchewan,
this 20th day of July.

Karl Bueckert
Senior Bankruptcy Analyst

This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.
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