Directive No. 29R2

Advertising by Trustees

Date: April 30, 2010

The Office of the Superintendent of Bankruptcy (OSB) has amended paragraph 6(b) of Directive No. 29, Advertising by Trustees, to replace the word "resident" with the word "non-resident". When the Directive was re-numbered and re-issued on August 14, 2009, part of the "non" in "non-resident" was inadvertently dropped in paragraph 6(b) of the English version of Directive. The omission of the word "non" is clearly an oversight since it appeared in paragraph 6 of Directive No. 30R issued on July 23, 1993, on the same topic. This error is also present in the French version of the Directive since the translator used the word "resident" to translate the document.

The omission has been corrected and the first portion of paragraph 6(b) has been replaced by the following: "(b) the advertising of a non-resident trustee office must always include the address of the principal place of business […]."

Coming into Force
The Directive No.29R2, Advertising by Trustees comes into force on April 30, 2010.

Enquiries
If you require further information, please do not hesitate to contact the OSB office nearest you.

James Callon
Superintendent of Bankruptcy

Issued: April 30, 2010

(This Directive supersedes Directive No. 29 issued on August 14, 2009, on the same topic)

Interpretation

1. In this Directive,

"Act" means the Bankruptcy and Insolvency Act;

"Rules" means the Bankruptcy and Insolvency General Rules

Authority and Purpose

2. This Directive is issued pursuant to paragraphs 5(4)(b) and (c) of the Act.

3. The purpose of this Directive is to outline the position of the Superintendent concerning advertising by trustees in general.

Policy

4. When advertising their services, trustees shall always identify themselves as Trustee in Bankruptcy.

5. A trustee shall not advertise, directly or indirectly, in a manner that:

(a) is false or misleading;

(b) contravenes professional good taste or fails to uphold professional courtesy;

(d) refers to the trustee as a specialist in a particular industry or area of insolvency; or

(e) involves a statement, the content of which the trustee cannot substantiate.

6. The following guidelines apply in all advertising by trustees:

(a) trustees may advertise their services anywhere in Canada provided that their advertising indicates in which province and/or territory they are licensed, if the advertisement is outside the province and/or territory in which they are licensed;

(b) the advertising of a non-resident trustee office must always include the address of the principal place of business from which an individual trustee normally practises and this address must be prevalent in the advertisement;

(c) the advertising of a non-resident office must be done in a manner which will not convey to the public the impression that there is a resident individual trustee in that office;

(d) in advertising, the name of trustees and full-time employees may appear and their status must be identified accordingly (i.e., trustee, estate administrator); and

(e) it is permissible for trustees to use a logo to identify their firm.

7. Asset realization, contributions to the estate by the debtor as well as trustee’s fees and expenses are governed by the Act, Rules, individual circumstances and orders of the Court. As these amounts are not predictable, it is difficult to conceive that this type of publicity would not be misleading. In any event, if charges and/or expenses are advertised, it must be done in conformity with the provisions of this Directive and with the standards described in Appendix A.

8. Subject to Directive No. 15, Trustee Consultation Fees in Bankruptcies and Proposals, it is acceptable for a trustee to advertise his or her fees in respect of a preliminary or initial consultation prior to bankruptcy.

9. The issuance of this Directive does not affect trustees registered under the Bankruptcy Assistance Program who participate in the said program by reason of a previously granted exemption.

Coming into Force

10. This Directive comes into force on April 27, 2010.

Enquiries

11. For any questions pertaining to this Directive, please contact your local OSB office.

James Callon
Superintendent of Bankruptcy

Appendix A

Canadian Association of Insolvency & Restructuring Professionals’ (CAIRP) Bulletin on Compliance in Advertising (October 2000)

(Issued by the Professional Conduct Committee (PCC) in order to put all members and trustees on notice that several practices do not conform to the Directives and CAIRP’s Rules)

1. False Names: It is the opinion of the PCC that placing an extra "A" in front of a firm’s name contravenes paragraphs 5(a) and 5(b) of the Superintendent's Policy Statement 30R - Advertising by Trustees (now subsection 5(a) and (b) of Directive No. 29) and violates CAIRP's Rules as it is false advertising. Similarly, a standalone alphabetical listing under a name different from the firm's licensed name is unacceptable; i.e., "Bankruptcy Boutique".

2. Principal Office: Another common fault that the PCC has found with advertising is that the principal place of business is not indicated where a firm lists several addresses but does not have a resident trustee at each of the locations listed in the ad. It would be acceptable to say "by appointment only" where the address is for a satellite or non-resident office. The wording of Directive No. 30R, paragraph 6 (c) (now subsection 6(c) of Directive No. 29) provides the best guidance as to what is intended by the Directive, "It should not convey to the public the impression that there is a resident individual trustee in that office."

One member has dealt with this very clearly by showing "Mr. CIRP trustee in bankruptcy" at his address and "Ms. EA, estate administrator" at his non-resident office address.

3. Exclusive Headings: The Superintendent's Directive requires that trustees must identify themselves as "trustee in bankruptcy" in their advertising. Several members have said that this is redundant when they are listing themselves under a Yellow Pages or a newspaper heading such as "bankruptcies - trustees", which is reserved only for trustees. On the other hand, trustees have complained to CAIRP that non-trustees have been allowed to place ads in these sections. As a result, the PCC has come to the conclusion that the requirement to use "trustee in bankruptcy", as required by Directive No. 30R (now Directive No. 29) should remain in this Directive. At the same time, it will be writing to the Yellow Pages Publishers to ask them to refuse any ads for this section unless the advertiser is identified as "trustee in bankruptcy". This will make it much easier to prevent non-trustees from advertising in these sections. Until now, the ads have been removed after the fact.

4. Estate Administrators: In keeping with the principle that the “bankruptcies- trustees” section is exclusively for trustees, the PCC asks that you remove any individual listings for estate administrators.

5. Photos: Photos of office staff or models without using names are acceptable. When names are used in the ad, the status and full name of the employee must be included. Most trustees take appointments under their corporate licence. When they put in their photo and feature their name prominently in a display ad, the name of their firm must be included.

6. Internet Listings: Internet listings constitute advertising and the content must comply with advertising standards.

7. Practical Experience: When ads refer to years of experience, the number of years should refer to the number of years the trustee has held his or her licence.