Harry Bick and Friedman & Friedman Inc. — April 24, 2002
Professional Conduct Decision
What is a professional conduct decision?
An investigation into a Licensed Insolvency Trustees (LIT)'s professional conduct is initiated when there is information to suggest that the LIT has not properly performed the duties of a trustee or there has been improper administration of an estate or lack of compliance with the Bankruptcy and Insolvency Act (BIA).
In some cases, the findings are sufficiently serious to support a recommendation for sanctions against the LIT's licence (cancel or suspend a LIT's licence (subsection 13.2(5) of the BIA) or impose conditions or limitations (subsection 14.01(1) of the BIA)).
The professional conduct decision is deemed to be a decision of a federal board, commission or tribunal and may be judicially reviewed by the federal court.
In the matter of
Friedman & Friedman Inc. —
holder of a corporate trustee licence
for the province of Québec
Harry Bick —
holder of an individual trustee
licence for the province of Québec
Decision under the Bankruptcy and Insolvency Act
Whereas a complaint has been filed by a creditor against Friedman & Friedman Inc. and Mr. Harry Bick in relation to the administration of the bankruptcy estate of the Pourvoirie J.B Scott Inc.;
Whereas the National Auditing Group was asked to audit the administration of the bankruptcy estate and, as a result, issued a report which found that the abovementioned licensed trustees had failed in various respects to properly fulfil their statutory duty in the administration of the said estate;
Whereas the said report resulted in the appointment of Mr. Michel Leduc, a Senior Analyst, Disciplinary Affairs, to conduct a disciplinary investigation;
Whereas on August 10, 1999, Mr. Leduc issued a disciplinary report;
Whereas the said disciplinary report alleges that both the corporate trustee and the individual trustee have committed offences in the administration of the bankruptcy estate of the Pourvoirie J.B. Scott Inc., namely in that:
- Trustee Friedman & Friedman Inc., acting through Harry Bick, sold the assets of the debtor at a price that was grossly inadequate, even by liquidation standards;
- Trustee Friedman & Friedman Inc.inspectors as well as to the Office of the Superintendent of Bankruptcy (OSB) and to the Court a statement of receipts and disbursements that did not include all the monies collected by the Trustee and that did not provide the full details of the uncollected receipts and on the disbursements;
- Trustee Friedman & Friedman Inc., acting through Harry Bick, failed to collect all monies owed to the estate;
- Trustee Friedman & Friedman Inc. failed to provide the OSB with a supplementary statement of receipts and disbursements after it collected further monies subsequent to the initial statement of receipts and disbursements;
- Trustee Friedman & Friedman Inc. failed to deposit in the estate account all monies collected in the course of their administration of the estate.
Whereas both trustees, though not having made any admission with respect to the breaches alleged against them in the disciplinary report, did not seek to challenge the findings of the report;
Whereas, aside from Trustee Harry Bick, the other trustees performing duties within the firm of Friedman & Friedman Inc. were neither employees nor associates of the firm at the time of the bankruptcy of Pourvoirie J.B. Scott Inc.;
Whereas the parties have submitted to me the draft of this decision, which in my opinion is fair and reasonable in the specific circumstances of this case and requires no amendment;
By these reasons:
I, the undersigned, Fred Kaufman, Delegate of the Superintendent of Bankruptcy by virtue of the powers vested in me under section 14.01 of the Bankruptcy and Insolvency Act,
Do Suspend, for a period of two years, the individual trustee licence held by Harry Bick; as a result, Mr. Bick will be barred from practicing as a trustee in bankruptcy and from acting in that capacity for any person under the Bankruptcy and Insolvency Act;
Do order the firm of Friedman & Friedman Inc. to:
- reimburse to the bankruptcy account of Pourvoirie J.B. Scott Inc., the amount of $5,000.00 which shall be distributed to creditors;
- reimburse to the bankruptcy estate of Pourvoirie J.B. Scott Inc., the amount of $1,001.16 which was owed to the estate by Ted Berenstein & Vinsteve Investments Inc. for the lease of land, and which shall be distributed to creditors;
- reimburse to the bankruptcy estate of Pourvoirie J.B. Scott Inc., the amount of $375.00 which was owed to the estate by Ted Berenstein & Vinsteve Investments Inc. as landlord, and which shall also be distributed to creditors;
- distribute to the creditors the amount of $813.00 collected by the firm on February 14, 1996.
The payment of the aforementioned amounts shall be completed within fifteen (15) days from the date of signature of this order, failing which the corporate trustee shall be considered in breach of a condition of its licence, as provided for in section 13.2(5)(b).
Signed this 24th day of April, 2002.
original signed by
Fred Kaufman, Q.C.
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.
- Date modified: