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.
Directions to THE BANK OF NOVA SCOTIA
828 Bank Street, Ottawa, Ontario K1S 5B1
(December 11, 2017)
In the matter of:
Michael Carson, Shannon Desaulniers and
Surgeson Carson 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 Michael Carson (“Carson”) is the holder of an individual licence as a licensed insolvency trustee;
Whereas Surgeson Carson Associates Inc. (“SCAI”) is the holder of a corporate licence as a licensed insolvency trustee;
Whereas Carson is an owner of SCAI and a licensed insolvency trustee practitioner of SCAI;
Whereas Shannon Desaulniers (collectively with Carson, the “Trustees”) is the holder of an individual licence as a licensed insolvency trustee and is employed by SCAI;
Whereas the Office of the Superintendent of Bankruptcy (“OSB”) conducted a trustee office visit of SCAI’s practice and provided to the Trustees a Licensed Insolvency Trustee Office Visit Report;
Whereas the Licensed Insolvency Trustee Office Visit Report identified a significant number of serious issues with the handling of estate trust funds and banking, as well as deficiencies and non-compliance with respect to the general administration of files;
Whereas the OSB was in constant communication with SCAI and the Trustees to obtain further information and to rectify the deficiencies that had been identified;
Whereas the Trustees have been given ample time, including several deadline extensions, to comply with banking issues, including materially significant unauthorized withdrawals from estate trust funds, and have yet to deliver meaningful results;
Whereas SCAI’s current file inventory totals 417 estates;
Whereas according to the 2017 Annual Banking Report, the current estate inventory is comprised of an aggregate amount of approximately $1,287,135.86 in the trust bank accounts;
Whereas I believe on reasonable grounds that the estates, the rights of the creditors and debtors require protection;
Whereas the Superintendent may, for the protection of an estate, the rights of creditors or the debtor, 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) which includes the conduct of a trustee or a trustee acting as a receiver, 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, Jack Steinman, in my capacity as delegate for the Superintendent and pursuant to paragraphs 14.03(1)(b) and (c) of the Act, direct The Bank of Nova Scotia, 828 Bank Street, Ottawa, Ontario K1S 5B1 to:
- consider, upon receipt of the present directions, Ms. Eva Provenzano or Mr. Nicholas Millen, Senior Bankruptcy Analysts of the OSB, as the only authorized signatory as relates to any operations on the funds credited to the estates of bankruptcies and proposals administered by Michael Carson, Shannon Desaulniers and Surgeson Carson Associates Inc.;
- 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 Michael Carson, Shannon Desaulniers and Surgeson Carson Associates Inc. without the countersignature of Ms. Eva Provenzano or Mr. Nicholas Millen;
- not pay out of these accounts: cheques, bills of exchange, bank drafts or other instruments, issued before the receipt of these directions which are presented for payment after the receipt of these directions without these cheques, bills of exchange, bank drafts or other instruments being signed by Ms. Eva Provenzano or Mr. Nicholas Millen;
- provide, as soon as possible, the list of trust bank accounts of Michael Carson, Shannon Desaulniers and Surgeson Carson Associates Inc. and submit all statement of accounts, accepted cheques and other documents or information having to do with the above-mentioned estate trust bank accounts, to Ms. Eva Provenzano or Mr. Nicholas Millen, Senior Bankruptcy Analysts of the OSB, at 160 Elgin Street, 11th Floor, Suite B-100, Ottawa, Ontario K2P 2P7;
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 Bank of Nova Scotia, who 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 Toronto, Ontario, this 11th day of December 2017.
Regional Director, Ontario Region