Directions for Conservatory Measures to Diane Tung and Abubakar Khan—
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:
Sidney Charles Schiff
Schiff & Associates Inc.
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 Sidney Charles Schiff is the holder of an individual license as trustee in bankruptcy;
Whereas Schiff & Associates Inc. 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 Sidney Charles Schiff (the trustee) had an unacceptably high number of estate files under administration for more than three years as well as a number of deficiencies in banking and in the general administration of his estate administrations;
Whereas on August 5, 2003 and August 29, 2003, the Acting Associate Division Assistant Superintendent (A/ADAS), Toronto Division Office, Office of the Superintendent of Bankruptcy (OSB), corresponded with Sidney Charles Schiff of Schiff & Associates Inc. directing him to submit a Closing Plan under the Initiative for the Orderly and Timely Administration of Files (IOTA);
Whereas on September 5, 2003, Sidney Charles Schiff submitted a Closing Plan under IOTA to the OSB pledging his full co-operation in bringing estate files to an expedient close;
Whereas on September 15, 2003, the A/ADAS acknowledged the receipt of Sidney Charles Schiff's closing plan, advising the plan was acceptable to the O.S.B. and that monthly progress reports should commence October 15, 2003, until the full execution of the Closing Plan;
Whereas Sidney Charles Schiff failed to submit monthly closing progress reports for Oct. 15, 2003, Nov. 15, 2003, Dec. 15, 2003, Jan 15, 2004, Feb 15, 2004 despite the trustee receiving monthly correspondence from the A/DAS providing the trustee's open inventory listing (report 13); the comparison report detailing the monthly "aged" percentage change in the trustee estates and intimating to the trustee that his next monthly progress report was due;
Whereas on March 5, 2004, a meeting was held between the Sidney Charles Schiff, the A/DAS and the Senior Bankruptcy Analyst (SBA) at the Toronto Divisional Office. In this meeting the O.S.B. shared information with the trustee showing according to their records, none of his "aged" estate administrations were getting closed. The trustee undertook to close all files in two weeks, starting March 11, 2004;
Whereas on March 5, 2004 immediately after the meeting between the trustee and the A/DAS and the SBA, a letter was sent to the trustee from the SBA documenting in writing the trustee's undertaking to close the "aged" files;
Whereas on April 2, 2004, the SBA noted the trustee had failed to adhere to the terms of his closing plan submitted Sept. 5, 2003, the trustee was invited to attend to the OSB Toronto Divisional Office on April 8, 2004 to meet with the SBA and the A/DAS. The trustee's total lack of progress in closing his "aged" files were discussed and again the trustee gave his assurance he would immediately focus on his outstanding aged files.
Whereas the trustee failed to submit his monthly progress report due by April 15, 2004, the A/DAS corresponded with the trustee on April 20, 2004 and demanded the said report;
Whereas on April 23, 2004 the trustee corresponded with the A/DAS providing a report;
Whereas on June 15th, July 15th, Aug 15th, Sept 15th, Oct 15th, Nov 15th and Dec 15th of 2004 the trustee failed to submit his monthly progress report on the 15th of these months despite repeated correspondence from the A/DAS;
Whereas on January 5th, 2005 the A/DAS corresponded with the trustee, providing the trustee a copy of his open inventory (report 13) as of December 31, 2004, informing the trustee all of his files were over 36 months old and the continued requirement to file monthly progress reports with the next report due January 15th, 2005;
Whereas Sidney Charles Schiff failed to submit his monthly progress report due by January 15th 2005;
Whereas Sidney Charles Schiff has repeatedly failed to close estate administrations and file monthly progress reports;
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 section 14.03(2) of the Act;
Whereas the Superintendent has delegated to me, in accordance with section 14.01(2) of the Act, the powers of the Superintendent as specified at section 14.03(1) of the Act, in the circumstance referred to in section 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;
I, Glenn Steiner, in my capacity as delegate for the Superintendent, direct:
That, pursuant to section 14.03(1)(b) of the Act, Diane Tung and/or Abubakar Khan ensure the validity and justification of all payments for expenses, fees, remuneration, etc. from the estate trust bank accounts administered by Sidney Charles Schiff / Schiff & Associates Inc. 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 estate trust bank accounts administered by Sidney Charles Schiff / Schiff & Associates Inc., 2 Lansing Square, Suite 501, Toronto Ontario, M2J 4P8 at the TD Canada Trust, located at 7085 Woodbine Avenue, Markham Ontario L3R 1A3.
That these directions take effect immediately and will stay in place until such time as I am satisfied that the estates no longer require protection;
That, pursuant to subsection 14.03(3) of the Act, this direction is binding on Diane Tung and Abubukar Khan, who must comply with this direction;
That , pursuant to section 14.03(4) of the Act, a person who complies with this direction is not liable for any act done by that person only to comply with the direction.
Signed at the City of Toronto Ontario, this 18th day of April, 2005.
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