Directive No. 27R

Advances of Trustee's Remuneration for Bankruptcies Under Ordinary Administration

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Directive No. 27R

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The Office of the Superintendent of Bankruptcy (OSB) received a number of questions from various stakeholders regarding Directive No. 27, Advances of Trustee's Remuneration for Bankruptcies Under Ordinary Administration.

There was uncertainty in terms of the trustees' reporting obligations under paragraph 7 of the Directive. Specifically, subparagraph 7(1)(e) of  Directive No. 27 referred to only one of the three ways in which a trustee can obtain proper authorization to withdraw an advance on his or her remuneration and the term "unless otherwise required"; in subparagraph 7(2) of the Directive was too vague and created unnecessary reporting obligations.

Directive No. 27 has been amended as follows:

  • (1) Subparagraph 7(1)(e) now reflects the three ways in which an advance on a trustee's remuneration may be approved (as provided for in paragraph 4 of the Directive):
    • (1) by a resolution of a duly constituted meeting of creditors;
    • (2) by a majority of the inspectors; or
    • (3) by a Court Order approving payment of the advance.
  • (2) Subparagraph 7(2) of the Directive now requires trustees to remit a copy of the documents referred to in subparagraph 7(1) to the OSB at the time of filing the Final Statement of Receipts and Disbursements and to the registrar or taxing officer if and when there is a taxation hearing. Trustees must only remit a copy of the documents referred to in subparagraph 7(1) to the creditors upon request.

Coming into Force

Directive 27R comes into force on February 12, 2010.

Enquiries

If you require further information, please do not hesitate to contact the OSB office nearest you.

James Callon
Superintendent of Bankruptcy


Issued: February 10, 2010

(Supersedes Directive No. 27 issued on August 14, 2009, on the same topic)

Interpretation

  1. In this Directive,
    • "Act" means the Bankruptcy and Insolvency Act;
    • "OSB" means the Office of the Superintendent of Bankruptcy;
    • "Rules" means the Bankruptcy and Insolvency General Rules.

Authority and Purpose

  1. This Directive is issued pursuant to the authority of paragraphs 5(4)(b) and (c) of the Act.
  2. The purpose of this Directive is to set out the proper procedure the trustee must follow when making an interim withdrawal or withdrawing an advance on his or her remuneration for an ordinary administration bankruptcy.

Procedure

  1. To withdraw an advance on his or her remuneration, the trustee must obtain proper authorization in the form of a resolution of a duly constituted meeting of creditors or of a majority of the inspectors or make application to the Court for an order approving payment of the advance.
  2. The trustee must ensure that sufficient funds remain in the trust account to cover the disbursements and fees necessary to complete the administration of estates.
  3. The request of the trustee for an advance shall stipulate the specific dollar amount, which should also be reflected in the minutes of the meeting of creditors or inspectors and/or in the Court Order.
  4. (1) Trustees shall have in their file the following information for each authorized advance on the remuneration:
    • (a) number of hours worked;
    • (b) tasks performed;
    • (c) hourly rates;
    • (d) other factors for consideration in the calculation of fees; and
    • (e) resolution of a duly constituted meeting of creditors, resolution of a majority of the inspectors, or Court Order approving payment of the advance, whatever the case may be.

    (2) Trustees shall remit a copy of the documents referred to in subparagraph 7(1) to the OSB at the time of filing the Final Statement of Receipts and Disbursements and to the registrar or taxing officer if and when there is a taxation hearing. Trustees must only remit a copy of the documents referred to in subparagraph 7(1) to the creditors upon request.

  5. (1) When a registrar or taxing officer taxes the remuneration of the trustee to an amount that is less than the advance withdrawn by the trustee, this excess shall be repaid to the estate without delay.

    (2) The trustee must notify the official receiver in writing of the repayment or other changes due to the taxation.

  6. The registrar or taxing officer is not bound by this Directive and can exercise his or her discretion in relation to the taxation of the trustee's accounts.

Coming into Force

  1. This Directive comes into force on February 12, 2010.

Enquiries

  1. For any questions pertaining to this Directive, please contact your local OSB office.

James Callon
Superintendent of Bankruptcy

Important notice:

The HTML version of this Directive is not the official version. In the event of an inconsistency between the HTML and PDF versions of this Directive, the PDF version prevails. Users are required to exercise due diligence with respect to the HTML version.

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