Bankruptcy—Cosign, Directions to the Bank of Nova Scotia, Don Mills Road, Toronto

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.


In the matter of:
Frank Sheldon Kisluk
Frank S. Kisluk Limited

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 Frank Sheldon Kisluk is the holder of an individual licence as trustee in bankruptcy;

Whereas Frank S. Kisluk Limited is the holder of a corporate trustee licence;

Whereas an investigation made by the Superintendent pursuant to section 5(3)(e) of the Act revealed that Frank Sheldon Kisluk (the trustee) had a number of deficiencies in banking and in the general administration of his estate administrations;

Whereas a Monitoring Review was conducted in December 2004 and a Monitoring Report was issued on January 11, 2005, followed up with supplementary compliance reviews conducted on February 18, 2005 and March 24, 2005, documenting the following serious and recurring estate administration deficiencies with respect to a number of estates:

  • failure to maintain proper and complete estate administration records;
  • failure to periodically reconcile the consolidated and individual estate trust accounts;
  • failure to ensure that estate trust accounts are not overdrawn;
  • failure to comply with the provisions of Bankruptcy and Insolvency Rules prescribing the tariff;
  • failure to ensure that estate trust funds are not subjected to unreasonable charges and fees;
  • failure to ensure that estate trust funds earn interest at a competitive rate, or are appropriately invested;
  • failure to obtain estate bond in the matter of the Atwell Fleming Young Ltd. estate;
  • failure to obtain the approval of the estate inspectors for actions including the disbursement of the trustee's fees and legal expenses;
  • failure to complete the administration of estates in a timely manner;
  • failure to submit a closing plan addressing the matter of the estates under administration for more than three years; and
  • failure to administer proposals filed under Division-I, Part III of the Act, in a proper and timely manner;

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)(b), a copy of which delegation is attached, along with copies of sections 14.01, 14.02 and 14.03 of the Act;

I, Darrin Ulley, in my capacity as delegate for the Superintendent, direct:

That, pursuant to section 14.03(1)(b) of the Act, Sergio Ciardullo and/or Stefan Miskovsky ensure the validity and justification of all payments for expenses, fees, remuneration, etc. from the estate trust bank accounts in the name of, administered by or any other way in the control of Frank Sheldon Kisluk / Frank S. Kisluk Limited that are presented for payment subsequent to the issuance of these directions, and if said payments are justified, to co-sign all cheques, bills of exchange, bank drafts, certificates of deposit and fund transfers payable out of the estate trust bank accounts in the name of, administered by or any other way in control of Frank Sheldon Kisluk / Frank S. Kisluk Limited at the Bank of Nova Scotia, 1500 Don Mills Road, Toronto, Ontario M3B 3K4;

This direction takes effect immediately and will remain in effect until such time as I am satisfied that the estates no longer require protection;

Pursuant to subsection 14.03(3) of the Act, this direction is binding on Sergio Ciardullo and Stefan Miskovsky, who must comply with this direction;

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 the direction.

Signed at the City of Toronto, Ontario, this 3rd day of December, 2007.

Darrin Ulley
Assistant Superintendent of Bankruptcy, Trustee Compliance

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