Bank Act (S.C. 1991, c. 46)

Marginal note:Appointment of liquidator

351 When making an order for the liquidation of a bank, or at any later time, the court may appoint any person, including a director, an officer, a shareholder or a member of the bank or any other bank, as liquidator of the bank.

Marginal note:Vacancy in liquidator’s office

352 Where an order for the liquidation of a bank has been made and the office of liquidator is or becomes vacant, the property of the bank is under the control of the court until the office of liquidator is filled.

Marginal note:Duties of liquidator

• 353 (1) A liquidator shall

  • (a) forthwith after appointment give notice thereof to the Superintendent and to each claimant and creditor of the bank known to the liquidator;

  • (b) forthwith after appointment publish notice thereof once a week for four consecutive weeks in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the bank has transacted any business within the preceding twelve months, requiring

    • (i) any person indebted to the bank to render an account and pay to the liquidator at the time and place specified in the notice any amount owing,

    • (ii) any person possessing property of the bank to deliver it to the liquidator at the time and place specified in the notice, and

    • (iii) any person having a claim against the bank, whether liquidated, unliquidated, future or contingent, to present particulars thereof in writing to the liquidator not later than sixty days after the first publication of the notice;

  • (c) take into custody and control the property of the bank;

  • (d) open and maintain a trust account for the moneys received by the liquidator in the course of the liquidation of the bank;

  • (e) keep accounts of the moneys received and paid out by the liquidator in the course of the liquidation of the bank;

  • (f) maintain separate lists of members and of each class of creditors, shareholders and other persons having claims against the bank;

  • (g) if at any time the liquidator determines that the bank is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions;

  • (h) deliver to the court and to the Superintendent, at least once in every twelve month period after the liquidator’s appointment or more often as the court requires, the annual statement of the bank prepared in accordance with subsection 308(1) or prepared in such manner as the liquidator thinks proper or as the court requires; and

  • (i) after the final accounts are approved by the court, distribute any remaining property of the bank among the shareholders, incorporators or members, according to their respective rights.

• Marginal note:Powers of liquidator

  (2) A liquidator may

  • (a) retain lawyers, notaries, accountants, appraisers and other professional advisers;

  • (b) bring, defend or take part in any civil, criminal or administrative action or proceeding in the name and on behalf of the bank;

  • (c) carry on the business of the bank as required for an orderly liquidation;

  • (d) sell by public auction or private sale any property of the bank;

  • (e) do all acts and execute documents in the name and on behalf of the bank;

  • (f) borrow money on the security of the property of the bank;

  • (g) settle or compromise any claims by or against the bank; and

  • (h) do all other things necessary for the liquidation of the bank and distribution of its property.

Marginal note:Due diligence

354 A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

• (a) financial statements of the bank represented to the liquidator by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or

• (b) a report of a person whose profession lends credibility to a statement made by them.

Marginal note:Examination of others

• 355 (1) Where a liquidator has reason to believe that any property of the bank is in the possession or under the control of a person or that a person has concealed, withheld or misappropriated any such property, the liquidator may apply to the court for an order requiring that person to appear before the court at the time and place designated in the order and to be examined.

• Marginal note:Restoration and compensation

  (2) Where an examination conducted pursuant to subsection (1) discloses that a person has concealed, withheld or misappropriated any property of the bank, the court may order that person to restore the property or pay compensation to the liquidator.

Marginal note:Costs of liquidation

356 A liquidator shall pay the costs of liquidation out of the property of the bank and shall pay or make adequate provision for all claims against the bank.

Marginal note:Final accounts

• 357 (1) Within one year after the appointment of a liquidator and after paying or making adequate provision for all claims against the bank, the liquidator shall apply to the court

  • (a) for approval of the final accounts of the liquidator and for an order permitting the distribution, in money or in kind, of the remaining property of the bank to its shareholders, or members, if any, or to the incorporators, according to their respective rights; or

  • (b) for an extension of time, setting out the reasons therefor.

• Marginal note:Application by shareholder or member

  (2) If a liquidator fails to make the application required by subsection (1), a shareholder of the bank or, if there are no shareholders of the bank, an incorporator — or, if the bank is a federal credit union, a member or shareholder of the federal credit union or, if there are no members or shareholders, an incorporator — may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

• Marginal note:Notification of final accounts

  (3) A liquidator must give notice of their intention to make an application under subsection (1) to the Superintendent, to each inspector appointed under section 349, to each shareholder of the bank or, if there are no shareholders, to each incorporator and to any person who provided a security or fidelity bond for the liquidation. If the bank is a federal credit union, the liquidator must also give the notice to each member of the federal credit union.

• Marginal note:Publication

  (4) The liquidator shall publish the notice required under subsection (3) in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the bank has transacted any business within the preceding twelve months or as otherwise directed by the court.

Marginal note:Final order

• 358 (1) If the court approves the final accounts rendered by a liquidator, the court shall make an order

  • (a) directing the bank to apply to the Minister for letters patent dissolving the bank;

  • (b) directing the custody or disposal of the documents, records and registers of the bank; and

  • (c) discharging the liquidator except in respect of the duty of a liquidator under subsection (2).

• Marginal note:Delivery of order

  (2) The liquidator shall forthwith send a certified copy of the order referred to in subsection (1) to the Superintendent.

Marginal note:Right to distribution of money

• 359 (1) If in the course of the liquidation of a bank that is not a federal credit union the shareholders resolve, or the liquidator proposes, to exchange all or substantially all of the remaining property of the bank for securities of another entity that are to be distributed to the shareholders or to the incorporators — or to distribute all or part of the remaining property of the bank to the shareholders or to the incorporators in kind — a shareholder or incorporator may apply to the court for an order requiring the distribution of the remaining property of the bank to be in money.

• Marginal note:Right to distribution of money — federal credit union

  (2) If in the course of the liquidation of a federal credit union the members resolve, or the liquidator proposes, to exchange all or substantially all of the remaining property of the federal credit union for securities of another entity that are to be distributed to the members or to members and shareholders — or to distribute all or part of the remaining property of the federal credit union to the members or to members and shareholders in kind — a member or shareholder may apply to the court for an order requiring the distribution of the remaining property of the federal credit union to be in money.

• Marginal note:Powers of court

  (3) On an application under subsection (1) or (2) , the court may order

  • (a) all of the remaining property of the bank to be converted into and distributed in money; or

  • (b) the claim of any person applying under this section to be satisfied by a distribution in money.

• Marginal note:Order by court

  (4) If an order is made by a court under paragraph (3)(b), the court

  • (a) must fix a fair value on the share of the property of the bank attributable to the person;

  • (b) may in its discretion appoint one or more appraisers to assist the court in fixing a fair value in accordance with paragraph (a); and

  • (c) must render a final order against the bank in favour of the person for the amount of the share of the bank’s property attributable to the person.

Marginal note:Dissolution by letters patent

• 360 (1) On an application made pursuant to an order under paragraph 358(1)(a), the Minister may issue letters patent dissolving the bank.

• Marginal note:Bank dissolved

  (2) A bank in respect of which letters patent are issued under subsection (1) is dissolved and ceases to exist on the date of the issuance of the letters patent.

General

Definition of shareholder, member and incorporator

361 In sections 363 and 364, shareholder, member and incorporator include the heirs and personal representatives of a shareholder, member or incorporator, respectively.

Marginal note:Continuation of actions

• 362 (1) Notwithstanding the dissolution of a bank under this Part,

  • (a) a civil, criminal or administrative action or proceeding commenced by or against the bank before its dissolution may be continued as if the bank had not been dissolved;

  • (b) a civil, criminal or administrative action or proceeding may be brought against the bank within two years after its dissolution as if the bank had not been dissolved; and

  • (c) any property that would have been available to satisfy any judgment or order if the bank had not been dissolved remains available for that purpose.

• Marginal note:Service on bank

  (2) Service of a document on a bank after its dissolution may be effected by serving the document on a person shown as a director in the incorporating instrument of the bank or, if applicable, in the latest return sent to the Superintendent under section 632.

Marginal note:Limitations on liability

• 363 (1) Despite the dissolution of a bank, a shareholder, member or incorporator to whom any of its property has been distributed is liable to any person claiming under subsection 362(1) to the extent of the amount received by that shareholder, member or incorporator on the distribution.

• Marginal note:Limitation

  (2) An action to enforce liability under subsection (1) may not be commenced except within two years after the date of the dissolution of the bank.

• Marginal note:Action against class

  (3) A court may order an action referred to in subsections (1) and (2) to be brought against the persons who were shareholders, members or incorporators as a class, subject to any conditions that the court thinks fit.

• Marginal note:Reference

  (4) If the plaintiff establishes a claim in an action under subsection (3), the court may refer the proceedings to a referee or other officer of the court who may

  • (a) add as a party to the proceedings each person found by the plaintiff to have been a shareholder, member or incorporator;

  • (b) determine, subject to subsection (1), the amount that each person who was a shareholder, member or incorporator must contribute towards satisfaction of the plaintiff’s claim; and

  • (c) direct payment of the amounts so determined.

Marginal note:Persons who cannot be found

364 If a creditor, shareholder, member or incorporator to whom property is to be distributed on the dissolution of a bank cannot be found, the portion of the property to be distributed to that creditor, shareholder, member or incorporator is to be converted into money and paid in accordance with section 366.

Marginal note:Vesting in Crown

365 Subject to subsection 362(1) and sections 366 and 367, property of a bank that has not been disposed of at the date of the dissolution of the bank vests in Her Majesty in right of Canada.

Marginal note:Unclaimed money on winding-up

• 366 (1) Despite the Winding-up and Restructuring Act, if the business of a bank is being wound up, the liquidator or the bank must pay to the Minister on demand and in any event before the final winding-up of that business any amount that is payable by the liquidator or the bank to a creditor, shareholder, member or incorporator of the bank to whom payment of that amount has not, for any reason, been made.

• Marginal note:Records

  (2) If a liquidator or a bank makes a payment to the Minister under subsection (1) with respect to a creditor, shareholder, member or incorporator, the liquidator or bank must concurrently forward to the Minister all documents, records and registers in the possession of the liquidator or bank that relate to the entitlement of the creditor, shareholder, member or incorporator.

• Marginal note:Payment to Bank of Canada

  (3) The Minister shall pay to the Bank of Canada all amounts paid to the Minister under subsection (1) and shall provide the Bank of Canada with any document, record or register received by the Minister under subsection (2).

• Marginal note:Liquidator and bank discharged

  (4) Payment by a liquidator or a bank to the Minister under subsection (1) discharges the liquidator and the bank in respect of which the payment is made from all liability for the amount so paid, and payment by the Minister to the Bank of Canada under subsection (3) discharges the Minister from all liability for the amount so paid.