Conservatory Measures
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.
Canada
In the matter of:
John Brock Hobbs
Hobbs and Company
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 John Brock Hobbs is the holder of an individual license as trustee in bankruptcy;
Whereas Hobbs and Company is the holder of a corporate trustee license;
Whereas an investigation made by the Superintendent pursuant to section 5(3)(e) of the Act revealed that John Brock Hobbs had an unacceptably high number of estate files under administration for more than three years as well as banking deficiencies in the administration of his estates;
Whereas on July 23rd, 2003 the Division Assistant Superintendent (DAS), Hamilton Division Office, Office of the Superintendent of Bankruptcy (OSB), and a Senior Bankruptcy Analyst (SBA) met with John Brock Hobbs to discuss the closing plan to be submitted by the trustee under the Initiative for the Orderly and Timely Administration of Files (IOTA);
Whereas during this meeting, the trustee signed his closing plan which provided that he would be closing 22 files per month;
Whereas on September 10, 2003 the DAS of the Hamilton Division Office, and the SBA met again with John Brock Hobbs to discuss matters pertaining to IOTA and more specifically having to do with the trustee's deficiencies in banking, in particular issues dealing with the reconciliation of consolidated trust accounts;
Whereas from that time until today, the SBA met with the trustee on October 24, November 28, December 17, 2003 as well as on March 9, April 22 and June 11, 2004 to follow up on the progress on either of these two issues;
Whereas as of today and notwithstanding repeated communication between the SBA and the trustee on this issue, the trustee has not complied with his closing plan under IOTA;
Whereas I believe on reasonable grounds that the estates require protection;
Whereas the Superintendent may, for the protection of an estate, 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 paragraph 14.03(2)(b), a copy of which delegation is attached, along with copies of sections 14.01, 14.02 and 14.03 of the Act;
Whereas paragraphs 14.03(1)(b) of the Act apply;
I, the undersigned, Karl Bueckert, Senior Bankruptcy Analyst, in my capacity as delegate for the Superintendent of Bankruptcy, direct:
Murray Ferron and/or Janet Russell to ensure the validity and justification of all payments for expenses, fees, remuneration, etc. from the estate accounts administered by Hobbs and Company that are presented for payment subsequent to the issuance of these directions, and if said payments are justified, to co-sign all cheques, bills of exchange, bank drafts, certificates of deposit and fund transfers payable out of the accounts of estates administered by Hobbs and Company, in accounts 200-100-6, 200-101-4 and 200-133-7 of the Royal Bank of Canada, located at Airport & Stockdale Branch, 925 Stockdale Road, Main Floor, North Bay, Ontario, P1B 9N5 and accounts 46-07813 and 46-07910 of the CIBC, located at 4821 Yonge Street, North York, Ontario, M2N 5X2.
These directions take effect immediately and will stay in place until such time as I am satisfied the estates no longer need protection.
In accordance with subsection 14.03(3) of the Act, these directions bind their addressees, who must comply with them.
In accordance with subsection 14.03(4) of the Act, a person who complies with these directions is not liable for any act done by the person only to comply with them.
Signed, in the City of Saskatoon, Saskatchewan,
this .
Karl Bueckert
Senior Bankruptcy Analyst