Directions for Conservatory Measures to BDO Canada Limited—May 22, 2012

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:
Melvin Charles Zwaig
Zwaig 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 Melvin Charles Zwaig (the Trustee) is the holder of an individual license as trustee in bankruptcy;

Whereas Zwaig Associates Inc. is the holder of a corporate licence as trustee in bankruptcy;

Whereas the Trustee is the sole practitioner of Zwaig Associates Inc.;

Whereas Mr. Brian Haley from the Office of the Superintendent of Bankruptcy was informed by Ms. Elizabeth Rawson that the trustee was hospitalized since the weekend of January 31/February 1, 2009 and that to this date, he had not returned to his office;

Whereas on February 26, 2009 Ms. Dana Jurksaitis from the trustee's office informed Mr. Brian Haley from the Office of the Superintendent of Bankruptcy that Mr. Melvin Charles Zwaig had passed away that day;

Whereas a notice corroborating the death of Mr. Zwaig was published by the funeral director, Paperman and Sons Inc.;

Whereas the trustee's file inventory totals 130 estates with an aggregate amount of approximately $730,000 in the trust bank accounts (the “Zwaig estates”);

Whereas the Office of the Superintendent of Bankruptcy has been unable to identify any succession arrangement for the continued administration of the estates;

Whereas the Superintendent initially appointed Tammy Turner, and subsequently appointed Avi Koren and Abubakar Khan, all employees of the Superintendent, as Guardian Trustee;

Whereas the Superintendent has deemed it advisable to transfer the estate files in question to a private-sector Trustee;

Whereas BDO Canada Limited has consented to administer the Zwaig estates pursuant to this direction issued under paragraph 14.03(1)(a);

Whereas BDO Canada Limited shall, until discharged or another trustee is appointed in BDO Canada Limited's stead, perform the duties required of a trustee under this Act, but notwithstanding its discharge, BDO Canada Limited remains responsible for the performance of such duties as may be incidental to the full administration of the estates;

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 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 sections 14.01, 14.02 and 14.03 of the Act;

Whereas paragraph 14.03(2)(a) of the Act applies;

I, Kirti Guathier, in my capacity as delegate for the Superintendent, direct, pursuant to paragraphs 14.03(1)(a) and (b) of the Act, BDO Canada Limited, Guardian Trustee:

  1. To take the necessary steps to administer all estates and estate files previously administered by either Melvin Charles Zwaig and Zwaig Associates Inc., as well as any closed estates that may require further administration and any other of the trustee's files identified by the Official Receiver as requiring further administration;
  2. To keep the said property and records, deeds, books, documents, computerized data and bank accounts related to such files, to make an inventory of them, to preserve them and to administer them in accordance with the sections of the Act;
  3. To continue the administration of these files in accordance with the duties and responsibilities incumbent on trustees in bankruptcy according to the Act;

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 BDO Canada Limited, 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 Ottawa, Ontario, this 22 day of May, 2012.


space to insert signature

Kirti Gauthier
National Manager, Trustee Detection and Compliance


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

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