Directions to the Official Receiver

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:

Martin Daniel Bell
And
Graham Mathew Inc.


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 Martin Daniel Bell (the trustee) is the holder of an individual licence as trustee in bankruptcy;

Whereas Graham Mathew Inc. is the holder of a corporate licence;

Whereas an investigation made by the Superintendent pursuant to section 5(3)(e) of the Act revealed that the trustee had a number of deficiencies in the control of estate trust funds and estate administrations;

Whereas the Assistant Superintendent, Trustee Compliance and the Senior Bankruptcy Analyst have learned that:

  • a number of estates had funds missing from the estate accounts
  • the trustee failed to deposit cash payments received from insolvent persons in the estate accounts;
  • the trustee converted for his own benefit amounts for deposit to the corporate trustee's general account from August 4, 2006 to September 11, 2006;
  • in the summer of 2006, the trustee altered the name of the payee on a cheque made payable to a solicitor from an estate trust account, by inserting the name of the trustee's spouse;
  • the trustee failed to report the above violations to the Office of the Superintendent of Bankruptcy;

Whereas the trustee has failed to deposit forthwith in an estate trust all funds received for an estate, and

  • failed to maintain up-to-date books and records, including a proper control ledger, of estate funds;
  • permitted unauthorized payments from estate trust accounts;

Whereas a June 2007 practice review by the Senior Bankruptcy Analyst of the trustee's books and records revealed that the trustee was drawing fees prior to obtaining proper authorization;

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 subsection 14.03(2), 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)(a), (b) and (d) and (2)(b) of the Act apply to the circumstances of the trustee;

I, William Webster, in my capacity as delegate for the Superintendent, direct:

  1. That the Official Receiver take possession and control of the property of the bankruptcy and proposal estates and the estate files, and also of accounting and electronic data related to estate files administered by Martin Daniel Bell and Graham Mathew Inc., as listed in Appendix A or as identified as requiring administration, wherever they may be located, particularly at the following location:

    150 Pinebush Road,
    Cambridge, Ontario

    and remit them to Mr. Glenn Steiner, agent of the Office of the Superintendent of Bankruptcy, 600 – 25 St. Clair Avenue East, Toronto, Ontario, M4T 1M2.
  2. That, to enforce these directions, the Official Receiver may seek the help of all the persons he or she considers necessary.
  3. That, pursuant to sections 14.03(1)(d) of the Act, the Official Receiver not appoint Martin Daniel Bell and Graham Mathew Inc. in respect of any new estates until a decision is made under subsection 13.2(5) or 14.01(1), or until such time as I am satisfied that the estates no longer require protection;

Thesedirections take effect immediately and will remain in effect until such time as the undersigned is satisfied that they are no longer required;

In accordance with subsection 14.03(3) of the Act, these directions bind the Official Receiver, who must comply with them;

Pursuant to section 14.03(4) of the Act, a person who complies with this direction is not liable for any act done by that person only to comply with this direction.

Signed at the City of London Ontario, this .

William Webster
Assistant Superintendent, Trustee Compliance

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