Michael J. Connor (Nova Scotia) — December 16, 2005

Professional Conduct Decision

What is a professional conduct decision?

An investigation into a Licensed Insolvency Trustees (LIT)'s professional conduct is initiated when there is information to suggest that the LIT has not properly performed the duties of a trustee or there has been improper administration of an estate or lack of compliance with the Bankruptcy and Insolvency Act (BIA).

In some cases, the findings are sufficiently serious to support a recommendation for sanctions against the LIT's licence (cancel or suspend a LIT's licence (subsection 13.2(5) of the BIA) or impose conditions or limitations (subsection 14.01(1) of the BIA)).

The professional conduct decision is deemed to be a decision of a federal board, commission or tribunal and may be judicially reviewed by the federal court.

Canada
Province of Nova Scotia
County of Halifax

In the Matter of:
Professional Disciplinary Proceedings under the Bankruptcy and Insolvency Act respecting Michael J. Connor.

Final Order

Whereas Michael J. Connor (the 'Trustee') is holder of an individual trustee license;

Whereas the Trustee was formerly employed by KPMG Inc., in their Sydney, Nova Scotia, office;

Whereas it became apparent that there were serious deficiencies in the operation of the KPMG Inc. Sydney office during a time in which the Trustee was the sole individual Trustee responsible for that office;

Wherewas an investigation was conducted by the Senior Analyst and as a result thereof, a report of the Senior Analyst was made to the Superintendent pursuant to subsection 14.02(1) of the Bankruptcy and Insolvency Act (the 'Act') on February 16, 2004; Whereas said report alleged, inter alia, that the Trustee:

  1. Contrary to the provisions of Section 157.1 of the Act, Rules 36, 38 and 45 of the Code of Ethics for Trustees; and Directive 1R2 — Counselling in Insolvency Matters, failed to properly provide, or provide for, counselling as required by the Act, which failures included: 
    1. 18 instances of the falsification of counselling certificates by the mechanical duplication of the bankrupt's signature where no counselling had taken place, contrary to the provisions of Rule 45 of the Code of Ethics for Trustees;
    2. 41 instances of failing to provide counselling at all contrary to Section 157.1 of the Act and Rule 36 of the Code of Ethics for Trustees;
    3. 34 instances of the signing of counselling certificates where no counselling was provided contrary to Directive 1R2, Counselling in Insolvency Matters, and Rule 45 of the Code of Ethics for Trustees;
    4. 7 instances of submitting certificates to bankrupts for their signature, where the date was incorrect or where no counselling was provided, contrary to Rule 38 of the Code of Ethics for Trustees;
  2. Contrary to the provisions of Directive 1R2 – Counselling in Insolvency Matters, and Rules 36 and 48(b) of the Code of Ethics for Trustees, on 18 occasions engaged in the unauthorized drawing of counselling fees;
  3. Contrary to the provisions of Section 102(4) of the Act, Bankruptcy Rule 6(3), and Rule 36 of the Code of Ethics for Trustees, on 12 occasions failed to publish Notices of Bankruptcy, notwithstanding which, contrary to Rules 38, 45 and 52 of the Code of Ethics for Trustees, in 6 of those cases the Trustee as a Commissioner of Oaths allowed employees to swear false Affidavits before him in proof of publications which he knew, or ought to have known, had not taken place;
  4. Contrary to the provisions of Sections 16(3), 19(3), 170(1), and 30(1) of the Act, Directive 16R, Preparation of the Statement of Affairs, Directive 6R – Assessment of An Individual Debtor, and Rules 36, 37 and 44 of the Code of Ethics for Trustees, allowed to occur numerous deficiencies with respect to the administration of estate property, including:
    1. 1 instance of failing to assess the bankrupt, contrary to Directive 6R, Assessment of An Individual Debtor;
    2. 6 instances of failing to adequately assist the bankrupt in the preparation of the Statement of Affairs, contrary to Directive 16R — Preparation of the Statement of Affairs;
    3. 24 instances of failing to verify the Bankrupt's Statement of Affairs, contrary to Section 19(3) of the Act;
    4. 19 instances of failing to take possession of the property of a bankrupt, contrary to Section 16(3) of the Act;;
    5. 7 instances of failing to seek or obtain the approval of estate inspectors for his actions, contrary to Section 30(1) of the Act;
    6. 11 instances of failing to realize upon estate property, contrary to Section 16(3) of the Act;
    7. 3 instances of failing to seek or obtain a resolution of estate inspectors approving the Section 170 report, contrary to Section 170(1) of the Act;
    8. 3 instances of failing to provide complete and accurate information to the Superintendent and the Court in Section 170 reports, contrary to Section 170(1) of the Act;
    9. Numerous instances of failure to carry out his duties in a timely manner, contrary to Rule 36 of the Code of Ethics for Trustees;
    10. 1 instance of failing to provide accurate information to the Superintendent, contrary to Rule 37 of the Code of Ethics for Trustees;
    11. 3 instances of failing to avoid influence, interest or a relationship that might, in the opinion of an informed person, impair his judgment, contrary to Rule 44 of the Code of Ethics for Trustees;
  5. Contrary to sections 19(3), 26(1), 49(6), 66.12(6), 66.31(1), 102(3), 105(4), 106(1), 121(1), 168.1(1)(e), 168.1(1)(f), 170(1)(f), 170.1(8) and 178(2) of the Act, Directive 13 — Estate Bonding, Directive 3 — Duties of the Bankrupt to Deliver Credit Cards to the Trustee, and Bankruptcy Rule 115(2), failed to properly administer estates of which he was trustee, which failures included:
    1. 6 instances of failing to submit estates as ordinary administration estates where appropriate, contrary to section 49(6) of the Act;
    2. 2 instances of failing to convert estates to ordinary administration estates where appropriate, contrary to sections 49(6) and 102(3) of the Act, and Directive 13 – Estate Bonding;
    3. 11 instances of failing to accurately keep and record estate receipts, contrary to section 26(1) of the Act;
    4. 6 instances of charging of disbursements in excess of the tariff, contrary to Bankruptcy Rule 115(2);
    5. 8 instances of failing to dispose of the credit cards of bankrupts, contrary to Directive 3 – Duties of the Bankrupt to Deliver Credit Cards to the Trustee;
    6. 7 instances of committing errors and omissions with respect to first meetings of creditors, in failing to record the failure of a bankrupt to attend said meeting without cause, contrary to section 105(4) of the Act;
    7. 4 instances of failing to report the failure of a bankrupt to attend first meetings of creditors without cause in the section 170 report, contrary to section 170(1)(f) of the Act;
    8. 4 instances of failing to properly determine quorum at first meetings of creditors, contrary to section 106(1) of the Act, and failing to keep accurate minutes of said meetings, contrary to section 105(4) of the Act;
    9. Generally failing to verify bank deposits, contrary to section 19(3) of the Act;
    10. 2 instances of failing to issue Certificates of Discharge, contrary to sections 168.1(1)(f) and 170.1(8) of the Act;
    11. 4 instances of failing to promptly apply for a discharge hearing after opposing the discharge of a bankrupt, contrary to section 168.1(1)(e) of the Act;
    12. 2 instances of failing to properly deal with deemed annulments of consumer proposals, contrary to section 66.31(1) of the Act;
    13. 3 instances of failing to distribute dividends in consumer proposals, contrary to section 66.12(6) of the Act.
  6. Contrary to an agreement between CIPA and the Superintendent dated March 21, 2001, and contrary to sections 121(1) and 178(2) of the Act, in numerous estates the Trustee received payments from the bankrupt after the bankrupt's discharge.

Whereas the Trustee has elected not to proceed to a hearing regarding the allegations;

Whereas while the Trustee does not accept all the allegations and findings in the report of the Senior Analyst, the Trustee does acknowledge that his conduct fell markedly below the standard expected of a licensed Trustee in Bankruptcy, particularly insofar as the Trustee did falsify counselling certificates and thereby failed to comply with the Code of Ethics for Trustees;

Whereas the Trustee and the Superintendent have agreed to a disposition of this proceeding, which in the circumstances of this case appear to be fair, reasonable and not contrary the public interest;

For these reasons:

I, the undersigned, the Honourable Benjamin J. Greenberg, Q.C., Delegate of the Superintendent of Bankruptcy, pursuant to the powers delegated to me under section 14.01 of the BIA, hereby:

  1. Suspend the license of Michael J. Connor for a period of 15 months from a date beginning one week after the issuance of this Order;
  2. Order that prior to the end of the period of suspension, and as a condition of reinstatement, Michael J. Connor attend an oral board to be constituted by the Superintendent, the questions therein to be limited to the Delegation of Tasks Directive including Assessments;
  3. Order that prior to the end of the period of suspension, and as a condition of reinstatement, Michael J. Connor take a business ethics course which he shall select and have approved by the Office of the Superintendent prior to taking said course;
  4. Order that, at the end of the period of suspension, the license of Michael J. Connor shall thereafter be limited to undertaking assessments only, and Michael J. Connor shall not be able to engage in any other activities required to be performed by trustees.
  5. Order that, in the event that the Trustee fails to comply with the terms of this Order the Trustee shall be in default pursuant to section 13.2(5) of the Act.

Signed at Montreal, Québec, this sixteenth day of December, 2005

The Honourable Benjamin J. Greenberg, Q.C.
Delegate of the Superintendent



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

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