Directions to TD Canada Trust

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: Jean-Guy St-Georges


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 Mr. Jean-Guy St-Georges (the trustee) is the holder of an individual license as trustee in bankruptcy;

Whereas on January 21, 2010 the undersigned, pursuant to sections 14.03(1)(d) of the Act, gave instructions to the Official Receiver to not appoint the trustee in respect of any new estates until a decision is made under section 13.2(5) or 14.01(1), or until such time as I, the undersigned, am satisfied that the estates no longer require protection;

Whereas on January 26, 2010 a Senior Bankruptcy Analyst was charged with examining the professional conduct of the trustee, which investigation is ongoing;

Whereas in a letter dated February 16, 2010, the Assistant Superintendent, Licencing, of the OSB advised the trustee that his trustee licence was considered to be inactive as of February 15, 2010;

Whereas during a meeting at the office of the trustee on February 26, 2010, Suzanne Zummo and Robert Nehmé, employees of the Office of the Superintendent of Bankruptcy (OSB) became aware that the trustee was operating a consolidated bank account not authorized by the OSB through which he was administering funds related to insolvency files of different administration types, this contrary to Directive 5R3, paragraphs 3 and 7;

Whereas in a letter dated April 20, 2010 the trustee wrote that he deposited an amount of $5,000 into this account on February 16, 2010 and that he transferred said amount by a bank transfer to another trustee on March 10, 2010 stating "parce que je ne pouvais prendre le dossier";

Whereas the insolvency procedures for the estate related to these funds was filed by the other trustee on February 15, 2010;

Whereas in addition to the lengthy delay in transferring the funds, the trustee transferred the funds by way of a interaccount bank transfer rather than by cheque as required by subsection 25 (2) of the Act or by approval to make payments electronically from a trust account rather than by signed printed cheque as per Directive 5R3, paragraph 16;

Whereas the trustee affirms in his letter of April 20, 2010 that he has no cheques on hand for this account;

Whereas during the meeting on February 26, 2010 a verbal request was made of the trustee to provide proof that he was maintaining professional liability insurance, as required under paragraph 27(d) of the Superintendent's Directive on Trustee Licensing (No. 13R2), followed by the same request made in writing in a letter dated April 13, 2010, and that the trustee failed to provide proof that he maintains such insurance;

Whereas I believe on reasonable grounds that any estate administered by the trustee requires protection;

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

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

Whereas paragraphs 14.03(1)(b) and (c) and 14.03(2)(b) of the Act apply;

I, Robert Massé, Assistant Superintendent, acting in my capacity as delegate for the Superintendent, direct:

TD Canada Trust, branch located at 3590 St. Laurent Boulevard, Montréal, Quebec H2X 2V3:

  1. to make no debit, payment or transfer on funds credited to the account administered by Jean-Guy St-Georges, no. 4720-0040-5244896, without the countersignature of Ms. Suzanne Zummo or Mr. Robert Nehmé;
  2. not to pay out of these same accounts any bills of exchange, cheques, bank drafts, certificates of deposit, or other such instruments that may have been issued prior to receipt of these directions but are presented for payment after receipt of these directions, unless said cheques, bills of exchange or bank drafts have been co-signed by Ms. Suzanne Zummo or Mr. Robert Nehmé, in addition to Mr. Jean-Guy St-Georges;
  3. to submit all statements of accounts, accepted cheques and other documents or information having to do with the above-mentioned bank account, to Ms. Suzanne Zummo or Mr. Robert Nehmé, Senior Bankruptcy Analysts, 5 Place Ville-Marie, Suite 800, Montreal, Quebec, H3B 2G2;

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

That in accordance with section 14.03(3) of the Act, these directions bind the addressee, who must comply with them;

That, 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 Montreal, Quebec, this 5th day of May, 2010

Robert Massé
Assistant Superintendent
Office of the Superintendent of Bankruptcy

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