Jean Maurice Joseph Lazard; Lazard & Associates Inc.
Directions to TD Bank
1158 Bank Street, Ottawa—October 3, 2011
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.
In the matter of:
Jean Maurice Joseph Lazard and
Lazard & Associates 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 Jean Maurice Lazard (the "Trustee") is the holder of an individual licence as trustee in bankruptcy;
Whereas Lazard & Associates Inc. is the holder of a corporate licence as trustee in bankruptcy;
Whereas the Trustee is the sole practitioner of Lazard & Associates Inc.;
Whereas Ms. Navpreet Saini, Senior Bankruptcy Analyst (“SBA”), of the Office of the Superintendent of Bankruptcy (“OSB”) conducted a banking review of the Trustee’s practice on and , and provided to the Trustee a Banking Review Report dated ;
Whereas the Banking Review Report identified the following deficiencies, amongst others, in the Trustee’s banking practice:
- inability to produce satisfactory monthly bank reconciliations in accordance with Directive 5R4;
- failure to action several stale dated outstanding cheques;
- failure to action several outstanding deposits dating further back than 2-3 days before the end of the reconciliation period;
- inability to explain "Other Reconciling Items" for both Consolidated Bank Accounts. The Trustee indicated that this had been occurring since at least May 2009;
- failure to rectify or explain inconsistencies between the Trustee’s records and the OSB’s records;
- inability to provide sufficient and/or satisfactory explanations for funds remaining in closed estates;
- inability to locate documents or files at the time of review;
- inability to account for the disposal of estate trust funds;
Whereas an Improvement Plan dated was sent to the Trustee for the purpose of correcting deficiencies;
Whereas on , the SBA sent an Improvement Plan Progress Report to the Trustee via email and courier summarizing the Trustee’s progress in dealing with a variety of deficiencies;
Whereas the SBA’s conclusions, as found in the Improvement Plan Progress Report, note that the majority of the objectives set out in the December 14, 2010 Improvement Plan have not been met.
Whereas on the SBA reviewed all the documentation provided by the Trustee from the date of the Improvement Plan Progress Report and noted that several deficiencies remained uncorrected, almost two years after the banking review process began;
Whereas the Trustee has been given ample time, including several deadline extensions, to focus his attention on his banking deficiencies, and has yet to deliver meaningful results;
Whereas the Trustee’s current file inventory totals 787 estates;
Whereas according to the 2011 Annual Banking Report, the current estate inventory is comprised of an aggregate amount of approximately $896 000 in the trust bank accounts;
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 paragraph 14.03(2)(b) of the Act applies;
I, Kirti Gauthier, in my capacity as delegate for the Superintendent, direct the TD Bank (1158 Bank Street, Ottawa, ON, K1S 3X8), that, pursuant to paragraphs 14.03(1)(b) and (c) of the Act:
- it consider upon receipt of the present directions, Ms. Kim Desjardins or Ms. Navpreet Saini, Senior Bankruptcy Analysts, of the Office of the Superintendent of Bankruptcy, either alone or as co-signatories, as the only authorized co-signatories as relates to any operations on the funds credited to the estates of bankruptcies and proposals administered by Jean Maurice Joseph Lazard and Lazard & Associates Inc.;
- it make no debit, payment or transfer of funds credited to, or which ought to have been credited to, the estates of bankruptcies and proposals administered by Jean Maurice Joseph Lazard and Lazard & Associates Inc. without the co-signature of Ms. Kim Desjardins or Ms. Navpreet Saini, Senior Bankruptcy Analysts;
- it not pay out of these accounts: cheques, bills of exchange, bank drafts or other instruments, issued prior to the receipt of these directions that are presented for payment after the receipt of these directions, without these cheques, bills of exchange, bank drafts or other instruments being co-signed by Ms. Kim Desjardins or Ms. Navpreet Saini, Senior Bankruptcy Analysts;
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 subsection 14.03(3) of the Act, these directions bind the TD Bank, which must comply with them;
That, pursuant to subsection 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 Ottawa, Ontario, this .
(A) Assistant Superintendent of Bankruptcy
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.
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