Directions to the official receiver
April 25, 2023
In the matter of:
Allen W. MacLeod
D & A MacLeod Company Ltd.
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 Allen Wayne MacLeod is the holder of an individual licence as trustee under the Act (1511);
Whereas D & A MacLeod Company Ltd. is the holder of a corporate licence as trustee under the Act (1495);
Whereas Allen Wayne MacLeod carries out his professional activities within D & A MacLeod Company Ltd. (together the “LIT”);
Whereas to ensure the practices of the various trustees across the country are compliant, the Superintendent carries out monitoring activities to ensure that trustees administer files in accordance with legal requirements and carry out their responsibilities with care and diligence;
Whereas the LIT operates individual and consolidated bank accounts with total inventory as of April 22, 2023, as follows: individual Division I proposal bank accounts consisting of 37 files; a consolidated Division II Proposal account consisting of 485 files; a consolidated summary administration bankruptcy bank account consisting of 802 files; and individual ordinary administration bankruptcy bank accounts consisting of 158 files;
Whereas rule 36 of the Rules requires that LITs shall perform their duties in a timely manner and carry out their functions with competence, honesty, integrity and due care.
Whereas representatives of the OSB noted the LIT ’s inventory of aged estates was over the risk threshold established by the OSB and the LIT provided a closing plan dated March 15, 2019 to the OSB.
Whereas the LIT failed to meet all of the requirements of the 2019 Closing Plan as 27 of the 52 identified estates remained open at year end.
Whereas an Licensed Insolvency Trustee Office Visit (“LITOV”) was conducted virtually due to the COVID-19 pandemic from January to March 2021, and it was noted that the LIT continued to have aged estates over OSB’s thresholds.
Whereas the LIT was informed that a new closing plan was required in the LITOV Report issued on March 29, 2021.
Whereas from June to November 2021, the OSB reiterated its requirement for a new closing plan which the LIT failed to provide.
Whereas rule 60 of the Bankruptcy and Insolvency General Rules (the Rules) requires an LIT to apply to a taxing officer for a date for a taxation hearing within 30 days of receiving a Letter of Comment from the Superintendent;
Whereas the Superintendent has issued a total of 17 negative Letters of Comment (“NLOC”) between the dates of August 2021 to April 2023 on estates administered by the LIT. The requirement under rule 60 of the Rules was included in each of the Letters issued to the trustee and repeated requests were made for taxation hearing dates. To date, no court dates have been set nor has the LIT applied for any dates for a taxation hearing for 15 of the estates despite multiple follow-up communications by the Office of the Superintendent of Bankruptcy (the “OSB”).
Whereas section 34(2) of the Act requires an LIT to report to the court on estates that have not been fully administered within three (3) years of the bankruptcy if requested to do so by the Superintendent, as soon as practicable after receiving the request from the Superintendent.
Whereas the Superintendent has identified 76 estates (55 Summaries and 21 Ordinary administrations) which have not been fully administered within three (3) years of the bankruptcy and had requested the LIT , pursuant to section 34(2), to report to the court. To date, no court dates have been set by the LIT.
Whereas on April 28, 2022, June 1, 2022, June 27, 2022 and September 8, 2022, the OSB issued letters pursuant to s.34(2) of the Act to the LIT requesting that the LIT report to the court in relation to the 76 identified estates. The LIT has not scheduled a court date despite repeated requests to do so by the OSB.
Whereas the number of aged estates in the LIT’s inventory continue to be over the risk thresholds as of the date of this Conservatory Measure and a review shows that both the number and percentage of aged estates in the LIT ’s inventory have since increased in the past year.
Whereas rule 37 of the Rules states that LITs shall cooperate fully with representatives of the Superintendent in all matters arising out of the Act, these Rules or a directive.
Whereas I believe on reasonable grounds that the estates require protection;
Whereas the Superintendent of Bankruptcy 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 of Bankruptcy has delegated to me, in accordance with subsection 14.01(2) of the Act, the powers of the Superintendent as specified in 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)(d) of the Act apply;
I, Alain Langlois, in my capacity as delegate for the Superintendent direct:
That the Official Receiver not appoint Allen Wayne MacLeod and D & A MacLeod Company Ltd. in respect of any new estates and not accept any new estate filings from Allen Wayne MacLeod and D & A MacLeod Company Ltd. by mail, facsimile or electronically;
These instructions are effective immediately and will remain in effect until such time as the undersigned determines that the estates no longer require protection.
In accordance with subsection 14.03(3) of the Act, these directions bind the Official Receiver, who must comply with them.
Pursuant to subsection 14.03(4) of the Act, a person who complies with these directions is not liable for any act done by that person only to comply with these directions.
Signed at the City of Montreal, in the province of Quebec, this 25th day of April 2023.
National Manager, Major Cases
Integrity & Enforcement
Office of the Superintendent of Bankruptcy