Frank Sheldon Kisluk and Frank S. Kisluk Limited — June 1, 2011

Professional Conduct Decision

In the Matter of
Frank Sheldon Kisluk
Holder of a Trustee Licence
for the Province of Ontario

And

Frank S. Kisluk Limited
Holder of a Corporate Trustee Licence
For the Province of Ontario

Decision under the Bankruptcy and Insolvency Act
In Respect of Professional Conduct

This is, I hope, the last decision I will have to make in this file.

It results from a detailed undertaking signed by Mr. Kisluk on May 16, 2011, which has been filed in the record, and in virtue of which the Senior Bankruptcy Analyst has requested that these proceedings be concluded.

After studying the file I am of the opinion that it would be in the interest of justice to agree to this request.

Accordingly, I hereby ratify the said undertaking, declare it to be executory and binding, and order the Trustees herein to comply therewith under pain of all legal penalties.

Should there not be timely and full compliance therewith, all the rights of the other party to these proceedings are hereby reserved, including the right to take any further action required for the enforcement of all agreement and undertakings, or to deal with any failure to fulfil or comply with any obligations assumed under the said undertaking.

Upon full compliance by the Trustee, these proceedings shall be deemed concluded for all legal purposes, and acte given to the parties of the withdrawal of the Senior Bankruptcy Analyst's Report dated December 19, 2005, as requested by the OSB.

Montreal, June 1, 2011

The Honourable Perry Meyer, Q.C.
Delegate of the Superintendent of Bankruptcy

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Undertaking

By Frank Sheldon Kisluk

Whereas Frank Sheldon Kisluk, trustee in bankruptcy (the "Trustee"), was the subject of a professional conduct report dated December 19, 2005 which identified a number of deficiencies in his administration of estates;

Whereas the professional conduct report resulted in the Superintendent of Bankruptcy (the "Superintendent") appointing a delegate for the purposes of conducting a professional conduct hearing;

Whereas the delegate of the Superintendent has issued several orders directing the Trustee to take various steps, subjecting the Trustee to oversight and limiting the scope of the Trustee's authorized practice;

Whereas, notwithstanding that there has been substantial, but not full compliance with these orders, the Trustee seeks to have the professional conduct proceeding commenced by the December 19, 2005 report concluded;

Therefore, I Frank Sheldon Kisluk, trustee in bankruptcy, hereby voluntarily undertake as follows:

1. that the Trustee shall before 30 June 2011, submit to the Superintendent, via a Senior Analyst from time to time assigned, final Statements of Receipts and Disbursements (SRDs) and applicable Auditor's Reports for all open remaining estates, with the exception of the Eaglebrook and Mirage Furniture estates. With respect to the Eaglebrook and Mirage Furniture estates the Trustee shall forthwith seek the direction of the Court and submit to the assigned Senior Analyst, all the required documentation and do anything otherwise required by the Court within 30 days of receipt of said Court direction;
2. that the Trustee shall satisfy all documentation and information requests, including explanations sought by the assigned Senior Analyst in relation to the SRDs, by 30 June 2011 unless this time limit is extended on the application of the Trustee to the assigned Senior Analyst. Any extension will be at the sole discretion of the assigned Senior Analyst;
3. the Trustee will apply to the Court for taxations and discharges of all open estates (where applicable) and notify the Senior Analyst of the hearing dates as obtained. In this connection, the Trustee has engaged the services of Chee-Kong Leong, an independent Trustee in Bankruptcy, to prepare the relevant materials for these taxation and discharge hearings and to obtain Court hearing dates. A summary of the trustee's agreement with Mr. Leong is attached hereto as Appendix A. All costs related to the services of Chee-Kong Leong will be borne by Frank Kisluk personally and will not be charged to any estate. Furthermore, the Trustee shall ensure that the administration of the estates filed under his license, shall not be delayed, or otherwise hindered, for reasons of any inter-party disputes or issues if any, between the trustee and Mr. Chee-Kong Leong;
4. that the Trustee will reimburse any of the remaining estates within thirty days should it be discovered that any unauthorized draws, unreasonable bank charges or fees or overdrawn amounts have resulted in a loss to the estate;
5. that all funds received by the Trustee as compensation from the remaining estates after taxation by the Court, including reimbursement of disbursements, will be held in trust by the Trustee and applied against any unauthorized draws, unreasonable bank charges or fees or overdrawn amounts that have resulted in a loss to the estate or against lost interest until all estates are closed;
6. that the Trustee will administer the Estates until they are closed;
7. that the assigned Senior Analyst or another identified Superintendent employee shall ensure the validity and justification of all payments for expenses, fees, remuneration, etc. from the estate trust bank accounts in the name of, administered by or any other way in the control of the Trustee or the Corporate Trustee that are presented for payment subsequent to the issuance of these directions, and if said payments are justified, that the assigned Senior Analyst or the Superintendent employee shall co-sign all cheques, bills of exchange, bank drafts, certificates of deposit and fund transfers payable out of the estate trust bank accounts in the name of, administered by or any other way in control of the Trustee or other Trustee until the remaining estates are closed;
8. that after the terms of paragraphs 1-7 have been completed, the Trustee will voluntarily agree to operate under a restricted individual trustee license (the "Restricted License"), which shall include the following restrictions:
   1. that the Trustee not file any estates under his individual trustee license;
   2. that the Trustee not handle any trustee banking responsibilities as outlined in the Act, regulations or Superintendent's Directives; and,
   3. that the licence of the Corporate Trustee will be cancelled when all of the remaining estates are closed and in the meantime, no new estates shall be opened or administered under the name of the Corporate or Individual Trustee from the date of this Undertaking.
9. that before any restrictions on the Restricted License may be removed, the Trustee shall take and pass an Oral Board Examination and the Trustee shall satisfy the Superintendent that the removal of the restriction is justified and warranted, which decision shall be at the Superintendent's sole discretion;
10. that the Trustee may have his license associated with another Trustee in order to earn his income provided that his activities are within the scope of activities allowed under the Restricted License;
11. The Trustee shall continue to engage and assist the Auditor, David E. Crack, to prepare individual reports on each estate as presented so that the Auditor may file an interim status report with the Superintendent with respect to the process of reconciling the consolidated bank accounts, individual trust accounts including the dividend clearing account until all estates are closed.

The Trustee agrees that failure to comply with any of the terms of this undertaking will be considered a contravention of paragraph 13.2(5)(b) of the Bankruptcy and Insolvency Act.

Dated at Toronto, this 16 day of May, 2011.

Trustee

Witness

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Appendix A – Summary of Agreement between Frank S. Kisluk/Frank S. Kisluk Limited ("Kisluk") and Chee-Kong Leong ("Leong")

Kisluk represents that he has entered into an agreement with Leong that provides as follows:

1. Leong will assist Kisluk in the preparation of materials based on the Trustee files, as available, necessary for Kisluk to attend Court hearings for taxations of Statements of Receipts and Disbursements and/or application for the trustee's discharge hearings for the remaining estates;
2. Leong will assist Kisluk in obtaining court dates and organizing materials for Kisluk's attendances at Court. Subject to Court time being available, Leong will prepare materials and schedule all files for initial presentation at Court on available dates, and concluding no later than September 30, 2011. Kisluk will ensure his attendance at all hearings and that any additional court requirements are responded to in a timely manner.
3. The above timetable is only subject to an extension of time for completion if approved by the Superintendent.
4. Leong will bill Kisluk on a regular basis and Kisluk will pay the accounts as rendered. No charges for the services of Leong will be made to any estate.
5. Kisluk shall not hold Leong responsible or liable for any errors, mistakes, delay irregularities or deficiencies in Kisluk's administration of the estates or any failures of Kisluk to comply with the BIA, Superintendent requirements or Court requirements.