Professional Conduct Decision
What is a professional conduct decision?
An investigation into a Licensed Insolvency Trustees (LIT)'s professional conduct is initiated when there is information to suggest that the LIT has not properly performed the duties of a trustee or there has been improper administration of an estate or lack of compliance with the Bankruptcy and Insolvency Act (BIA).
In some cases, the findings are sufficiently serious to support a recommendation for sanctions against the LIT's licence (cancel or suspend a LIT's licence (subsection 13.2(5) of the BIA) or impose conditions or limitations (subsection 14.01(1) of the BIA)).
The professional conduct decision is deemed to be a decision of a federal board, commission or tribunal and may be judicially reviewed by the federal court.
Province of Ontario
Office of the Superintendent of Bankruptcy
Trustee and Corporate Trustee Licence
Limitation Order Issued Under
The Bankruptcy and Insolvency Act
In the matter of Frank Risman
Holder of a trustee licence
for the province of Ontario
Frank Risman Associates (Canada) Limited
Holder of a corporate trustee licence
for the province of Ontario
Whereas Frank Risman, trustee and Frank Risman Associates (Canada) Limited, corporate trustee, operate an office in the City of Toronto, Ontario;
Whereas, the Senior Analyst, Disciplinary Affairs (Senior Analyst) of the Office of the Superintendent of Bankruptcy (OSB) has submitted a Report (the Report) on the administration of Frank Risman, trustee and Frank Risman Associates (Canada) Limited, corporate trustee, collectively as "the Trustees", pursuant to the general delegation received regarding the application of subsection 14.02(1) of the Bankruptcy and Insolvency Act (BIA);
Whereas the Report identifies a number of irregularities and deficiencies where the Trustees have failed to properly fulfil their statutory duties of an administrative nature in respect of the Trustees' administration of estates during the period covered by the Report, based on an audit report dated March 2000 and a monitoring report dated March 2001, such as:
- Deficiencies in Third Party Deposit banking pursuant to Directive No. 5R.
- Deficiencies in operation of the Consolidated Bank Account (C.B.A.) pursuant to Directive No. 5.
- Operation of a "Dividend Clearing Account" for which there is no provision in the Act or Directives.
- Lack of Current Estate Ledgers for ordinary administrations/receiverships, pursuant to paragraph 9.(B) of Directive No. 5.
- Deficiencies in Taking Possession and Control and Inventory Taking, pursuant to S. 16.(3) of the Act and Directive 7.
- Irregularities in the propriety of costs and draws of final fees pursuant to Rules 64 and 65 in summary administrations.
- Deficiencies in distribution to creditors on a timely basis pursuant to S. 136.(2) of the Act.
- Deficiencies in filing notice pursuant to S. 245.(1) of the Act and in filing reports pursuant to S.245.(2) (3) of the Act.
- Lack of timely closure of administrations pursuant to S. 136.(2) of the Act.
Whereas the trustees indicated to the Senior Analyst that they had made changes to their practice in relation to the above noted deficiencies;
Whereas the office of the Superintendent performed a monitoring at the office of the Trustees which confirmed that the trustees had dealt with many of the issues identified in the report;
Whereas the parties have submitted to me this draft decision, which in my opinion is fair and reasonable in the specific circumstances of this case, and there is no reason to derogate from it;
I, Fred Kaufman, Delegate of the Superintendent of Bankruptcy, by virtue of the powers delegated to me under section 14.01 of the Bankruptcy and Insolvency Act,
Order that the trustee licences of Frank Risman and Frank Risman Associates (Canada) Limited, be limited for a period of four (4) months during which the trustees cannot be appointed to take on any new bankruptcies, proposals, receiverships or act as interim receivers but can continue to work on the bankruptcies, proposals, receiverships or act as interim receivers in the files for which they will have been appointed before the coming into force of this Order;
Order that the trustees submit a plan to the Office of the Superintendent of Bankruptcy, Toronto Division Office, indicating how all remaining files of the corporate trustee will be closed off in the 12 month period following the date on which this Order is signed, unless the Toronto Division Office of the OSB is provided with reasons it finds satisfactory, as to why some files cannot be closed;
Upon the failure of the trustee to comply with the condition to which the licence is subject, the trustee shall be in default pursuant to paragraph 13.2(5) (b) of the Act.
Order that this Order shall come into force two days after the date on which it was signed;
Toronto, June 24, 2003
The Honourable Fred Kaufman, C.M. Q.C.
Delegate of the Superintendent of Bankruptcy
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.