JoAnne Laurendeau, Nicole Lachance, Gerry Barberio
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.
In the matter of:
St-Georges, Hébert inc.
Directions for Conservatory Measures
(section 14.03 of the Bankruptcy and Insolvency Act)
Whereas the Bankruptcy and Insolvency Act provides the Superintendent of Bankruptcy with the general power to supervise the administration of all estates and matters to which the Act applies;
Whereas on May 31, 2002, an audit report identifying numerous deficiencies was produced with regard to Mr. Jean-Guy St-Georges and St-Georges, Hébert inc.;
Whereas on October 9, 2002, a mandate to review the conduct of trustees Mr. Jean-Guy St-Georges and St-Georges, Hébert inc. was conferred upon a Senior Analyst, Disciplinary Affairs, who is still investigating;
Whereas on May 5, 2003, the trustee met with the Official Receiver, Ms. JoAnne Laurendeau, to discuss the deficiencies that had not yet been corrected and new deficiencies that had been detected after the adjustment plan was prepared in January 2003;
Whereas on May 13, 2003 the Acting Senior Assistant Superintendent for the Montréal division wrote to the trustee demanding that he correct the following deficiencies and to send documentation proving that the deficiencies mentioned in the letter had been corrected:
- The lack of dishonesty insurance (also known as fidelity) mentioned at section 30 d) of Part II of the Trustee Licensing Directive;
- Transgressions contrary to the Superintendent's Directive #5 with regard to his consolidated account for summary administration files;
- Lack of payment or late payment of interest to the consolidated account for summary administration files;
- The repayment of banking fees of more than $10,000 for the period August 1998 to April 2003;
- The lack of a bank account for ordinary administration files.
Whereas the trustee did not provide as requested:
- The most recent bank statement for all his ordinary administration files, proposals and notices of intention or bank documents proving that accounts had been opened;
- The list of all third party deposits (bankruptcy, proposal and notice of intention files) as well as proof that these third party deposits had been credited to the estate account for which the third party deposit was intended or in a consolidated account for that purpose;
- Reports on the administration of 198 files that had been open more than 36 months explaining, among other things, the reasons these files are still open.
Whereas to date, the trustee has not sent to the Office of the Superintendent of Bankruptcy documents proving that he has corrected said deficiencies within the required time;
Whereas the trustee has 198 files that have been open more than 36 months and has not provided grounds to justify the majority still being open;
Whereas the trustee deposited estate funds in bank accounts that are not estate accounts, i.e., in account number 90191-00786-11 of the Bank of Nova Scotia, located at 505 St. Catherine Street West, Montréal, Quebec H3B 1B3 and account number 90191 002 0114618 of the Bank of Nova Scotia, located at 1002 Sherbrooke Street West, Scotia Tower, Montréal, Quebec H3A 3L6;
Whereas the trustee refuses or neglects to adequately account for his administration;
Whereas the Superintendent of Bankruptcy may, in order to protect assets, exercise the powers set out in subsection 14.03(1) of the Act, under the circumstances anticipated in subsection 14.03(2) of the Act;
Whereas the Superintendent of Bankruptcy has delegated to the undersigned, in accordance with subsection 14.01(2) of the Act, in certain situations mentioned in subsection 14.03(2), the Superintendent's powers as specified at subsection 14.03 (1) of the Act, copies of which delegation are attached, along with copies of subsections 14.01(2) and 14.03(1) to (4) of the Act;
Whereas subsections 14.03(1) and (2)b) of the Bankruptcy and Insolvency Act apply;
I, the undersigned, Michel Leduc, in my capacity as delegate for the Superintendent of Bankruptcy, direct:
Ms. JoAnne Laurendeau or Ms. Nicole Lachance or Mr. Gerry Barberio to ensure the validity and justification of all payments for expenses, fees, remuneration, etc. from the estate accounts administered by St-Georges, Hébert inc. that are presented for payment subsequent to the issuance of these instructions, 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 St-Georges, Hébert inc. in account number 90191-00786-11 of the Bank of Nova Scotia, located at 505 St. Catherine Street West, Montréal, Quebec H3B 1B3 and account number 90191 002 0114618 of the Bank of Nova Scotia, located at 1002 Sherbrooke Street West, Scotia Tower, Montréal, Quebec H3A 3L6.
These directions take effect immediately and will remain in place until further notice or until a decision is rendered under section 14.01 of the Act.
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 Montréal, Quebec,
June 20, 2003
Senior Analyst, Disciplinary Affairs
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