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 Marvin Zysman
Holder of a trustee licence
for the province of Ontario
Risman & Zysman Inc.
Holder of a corporate trustee licence
for the province of Ontario
Whereas Marvin Zysman, trustee and Risman & Zysman Inc., 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 has submitted a Report (the Report) on the administration of Marvin Zysman, trustee and Risman & Zysman Inc., corporate trustee, collectively "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:
- Failure to deposit all estate funds in the bank trust accounts pursuant to S.25.(1) of the Act and Directive No. 5 paragraph 4(B) on Estate Funds and Banking (Attachment 38), as well as delays of 30 days or more in making some deposits to the Consolidated Bank Account (C.B.A.) pursuant to S.25.(2) of the Act and Directive No. 5 paragraph 4(B);
- Non compliance with Directive No. 5 by using the C.B.A. for five Division I administrations, as well as for Division II proposals which is also contrary to S.66.26(2) of the Act;
- Failure to allocate interest monthly as required by Directive No. 5 paragraph 6(g) and to follow up on debtors' N.S.F. cheques;
- Operation of a "Dividend Clearing Account" for which there is no provision in the Act or Directive No. 5. As well, the postings to this account were continuous and not cut off each month and not shown on the actual date with summary and ordinary estate funds co-mingled and interest from this "clearing account" not being allocated to the C.B.A. until after the auditor spoke to the trustee;
- Deficiencies in taking possession and control of assets in one estate pursuant to S. 16(3) of the Act;
- Deficiencies in inventory taking in two estates contrary to Directive No. 7 on Inventory of Estate Assets, (Attachment 39);
- Deficiencies in realization of assets and review of the Statement of Affairs in six estates pursuant to S.16.(3) and 19.(3) of the Act ;
- Deficiencies in propriety of costs due to non compliance with Rule 64 in summary administrations and also non compliance with Rule 128 in four estates;
- Deficiencies in receiverships and acting in a dual capacity in two estates by not complying with S. 245.(1) and S.246.(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 offices of the Trustees from February 3 to 7, 2003 which confirmed that the trustees had dealt with many of the issues identified in the report;
Whereas Marvin Zysman, trustee claims to have acted in compliance with the policies and instructions of his partner, Mr. Frank Risman, a more experienced trustee;
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 Marvin Zysman and Risman & Zysman Inc, be limited for a period of three (3) 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 this Order shall come into force two days after the date on which it was signed ;
Signed in 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.