Directions for Conservatory Measures to the Canadian Imperial Bank of Commerce, 199 Bay Street, Commerce Court West, Concourse Level, Toronto, Ontario, M5L 1G9—March 8, 2012
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:
Martin Daniel Bell
Graham Mathew 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 Martin Daniel Bell (the trustee) was the holder of an individual licence as trustee in bankruptcy;
Whereas Graham Mathew Inc. was the holder of a corporate licence as trustee in bankruptcy;
Whereas an investigation made by the Superintendent pursuant to section 5(3)(e) of the Act revealed that the trustee had a number of deficiencies in the control of estate trust funds and estate administrations;
Whereas the Assistant Superintendent, Trustee Compliance and the Senior Bankruptcy Analyst have learned that:
- a number of estates had funds missing from the estate accounts;
- the trustee failed to deposit cash payments received from insolvent persons in the estate accounts;
- the trustee converted for his own benefit amounts for deposit to the corporate trustee's general account from August 4, 2006 to September 11, 2006;
- in the summer of 2006, the trustee altered the name of the payee on a cheque made payable to a solicitor from an estate trust account, by inserting the name of the trustee's spouse; and,
- the trustee failed to report the above violations to the Office of the Superintendent of Bankruptcy;
Whereas the trustee has failed to deposit forthwith in an estate trust all funds received for an estate, failed to maintain up-to-date books and records, including a proper control ledger, of estate funds; and permitted unauthorized payments from estate trust accounts;
Whereas a June 2007 practice review by the Senior Bankruptcy Analyst of the trustee's books and records revealed that the trustee was drawing fees prior to obtaining proper authorization;
Whereas the licenses of the trustee and the corporate trustee, respectively, were cancelled pursuant to a decision of the Superintendent of Bankruptcy dated February 4, 2011;
Whereas it has become necessary to substitute another Guardian Trustee in the place of the current Guardian Trustee, Tammy Turner;
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 subsection 14.03(2) of the Act;
Whereas the Superintendent has delegated to me, in accordance with subsection 14.01(2) of the Act, the powers of the Superintendent as specified at subsection 14.03(1) of the Act, in the circumstance referred to in subsection 14.03(2), a copy of which delegation is attached, along with copies of sections 14.01, 14.02 and 14.03 of the Act;
Whereas paragraphs 14.03(2)(a) of the Act applies;
I, Rebekah Johnston, in my capacity as delegate for the Superintendent, direct the Canadian Imperial Bank of Commerce, 199 Bay Street, Commerce Court West, Concourse Level, Toronto, Ontario, M5L 1G9 that, pursuant to sections 14.03(1)(b) and (c) of the Act:
- it consider upon receipt of the present directions, Abubakar Khan, Guardian Trustee, as the only authorized signatory as relates to any operations on the funds credited to the estates of bankruptcies and proposals administered by Martin Daniel Bell or Graham Mathew Inc.;
- it make no debit, payment or transfer of funds credited to, or which ought to have been credited to, the estates of bankruptcies and proposals administered by Martin Daniel Bell or Graham Mathew Inc. without the signature of Abubakar Khan, Guardian Trustee;
- it not pay out of these accounts: cheques, bills of exchange, bank drafts or other instruments, issued before the receipt of these directions that are presented for payment after the receipt of these directions, without these cheques, bills of exchange, bank drafts or other instruments being signed by Abubakar Khan, Guardian Trustee;
- it submit all statement of accounts, accepted cheques and other documents or information having to do with the above-mentioned estate trust bank accounts to Abubakar Khan, Guardian Trustee, Office of the Superintendent of Bankruptcy, 25 St. Clair Avenue East, Suite 600, Toronto, Ontario, M4T 1M2;
That these directions take effect immediately and will remain in effect until such time as the undersigned is satisfied that they are no longer required;
That in accordance with section 14.03(3) of the Act, these directions bind the Canadian Imperial Bank of Commerce, which must comply with them;
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 this direction.
Signed at the City of Ottawa, Ontario, this 8 day of March 2012.
Assistant Superintendent of Bankruptcy
This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.
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