Marginal note:Notice of default

112. The trustee shall give notice to the holders of debt obligations issued under a trust indenture of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee reasonably believes that it is in the best interests of the holders of the debt obligations to withhold the notice and so informs in writing the issuer, the guarantor or, in Quebec, the surety. The notice shall be given within the prescribed period.

Marginal note:Duties of trustee

113. A trustee in exercising their powers and discharging their duties shall

• (a) act honestly and in good faith with a view to the best interests of the holders of the debt obligations issued under the trust indenture; and

• (b) exercise the care, diligence and skill of a reasonably prudent trustee.

Marginal note:Reliance on statements

114. Despite section 113, a trustee is not liable if they rely in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

Marginal note:No exculpation

115. No term of a trust indenture or of any agreement between a trustee and the holders of debt obligations issued under the trust indenture or between the trustee and the issuer, the guarantor or, in Quebec, the surety shall operate so as to relieve a trustee from the duties imposed on the trustee by section 113.

Marginal note:Functions of receiver or sequestrator

116. A receiver or sequestrator of any property of a corporation may, subject to the rights of secured creditors, receive the income from the property, pay the liabilities connected with the property and realize the security interest of those on behalf of whom the receiver or sequestrator is appointed, but, except to the extent permitted by a court, the receiver or sequestrator may not carry on the activities of the corporation.

Marginal note:Functions of receiver-manager

117. A receiver-manager of the corporation may carry on any activities of the corporation to protect the security interest of those on behalf of whom the receiver-manager is appointed.

Marginal note:Directors’ powers cease

118. If a receiver-manager or sequestrator is appointed by a court or under an instrument or act, the powers of the directors of the corporation that a receiver-manager or sequestrator is authorized to exercise may not be exercised by the directors until the receiver-manager or sequestrator is discharged.

Marginal note:Duty to act

119. A receiver, receiver-manager or sequestrator appointed by a court shall act in accordance with the orders of the court.

Marginal note:Duty under instrument or act

120. A receiver, receiver-manager or sequestrator appointed under an instrument or act shall act in accordance with that instrument or act and any order of a court made under section 122.