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Cooperative Credit Associations Act (S.C. 1991, c. 48)

Act current to 2023-01-25 and last amended on 2022-01-01. Previous Versions

PART VIICorporate Governance (continued)

Liquidation and Dissolution (continued)

Simple Liquidation (continued)

Marginal note:Resolution

 Where the voluntary liquidation and dissolution of an association is proposed, the association may apply to the Minister for letters patent dissolving the association if authorized by a special resolution of the members and, where the association has issued one or more classes of shares, a special resolution of each class of shareholders.

Marginal note:Approval of Minister required

  •  (1) No action directed toward the voluntary liquidation and dissolution of an association shall be taken by an association, other than as provided in sections 327 and 328, until an application made by the association pursuant to section 328 has been approved by the Minister.

  • Marginal note:Conditional approval

    (2) Where the Minister is satisfied on the basis of an application made pursuant to section 328 that the circumstances warrant the voluntary liquidation and dissolution of an association, the Minister may, by order, approve the application.

  • Marginal note:Effect of approval

    (3) Where the Minister has approved an application made pursuant to section 328 with respect to an association, the association shall not carry on business except to the extent necessary to complete its voluntary liquidation.

  • Marginal note:Liquidation process

    (4) Where the Minister has approved an application made pursuant to section 328 with respect to an association, the association shall

    • (a) cause notice of the approval to be sent to each known claimant against and creditor of the association;

    • (b) publish notice of the approval once a week for four consecutive weeks in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the association transacted any business within the preceding twelve months;

    • (c) proceed to collect its property, dispose of property that is not to be distributed in kind to its members, discharge all its obligations and do all other acts required to liquidate its business; and

    • (d) after giving the notice required under paragraphs (a) and (b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, among its members according to their respective rights.

Marginal note:Dissolution instrument

  •  (1) Unless a court has made an order in accordance with subsection 331(1), the Minister may, if satisfied that the association has complied with subsection 329(4) and that all the circumstances so warrant, issue letters patent dissolving the association.

  • Marginal note:Association dissolved

    (2) An association in respect of which letters patent are issued under subsection (1) is dissolved and ceases to exist on the day stated in the letters patent.

Court-supervised Liquidation

Marginal note:Application for court supervision

  •  (1) The Superintendent or any interested person may, at any time during the liquidation of an association, apply to a court for an order for the continuance of the voluntary liquidation under the supervision of the court in accordance with this section and sections 332 to 344 and on such application the court may so order and make any further order it thinks fit.

  • Marginal note:Idem

    (2) An application under subsection (1) to a court to supervise a voluntary liquidation shall state the reasons, verified by an affidavit of the applicant, why the court should supervise the liquidation.

  • Marginal note:Notice to Superintendent

    (3) Where a person, other than the Superintendent, makes an application under subsection (1), the person shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

Marginal note:Court supervision thereafter

  •  (1) When a court makes an order under subsection 331(1), the liquidation of the association shall continue under the supervision of the court.

  • Marginal note:Commencement of liquidation

    (2) The supervision of the liquidation of an association by the court pursuant to an order made under subsection 331(1) commences on the day the order is made.

Marginal note:Powers of court

 In connection with the liquidation and dissolution of an association, the court may, where it is satisfied that the association is able to pay or adequately provide for the discharge of all its obligations, make any order it thinks fit including, without limiting the generality of the foregoing,

  • (a) an order to liquidate;

  • (b) an order appointing a liquidator, with or without security, fixing a liquidator’s remuneration and replacing a liquidator;

  • (c) an order appointing inspectors or referees, specifying their powers, fixing their remuneration and replacing inspectors or referees;

  • (d) an order determining the notice to be given to any interested person, or dispensing with notice to any person;

  • (e) an order determining the validity of any claims made against the association;

  • (f) an order, at any stage of the proceedings, restraining the directors and officers of the association from

    • (i) exercising any of their powers, or

    • (ii) collecting or receiving any debt or other property of the association, and from paying out or transferring any property of the association, except as permitted by the court;

  • (g) an order determining and enforcing the duty or liability of any present or former director, officer, member or shareholder

    • (i) to the association, or

    • (ii) for an obligation of the association;

  • (h) an order approving the payment, satisfaction or compromise of claims against the association and the retention of assets for that purpose, and determining the adequacy of provisions for the payment, discharge or transfer of any obligation of the association, whether liquidated, unliquidated, future or contingent;

  • (i) with the concurrence of the Superintendent, an order providing for the disposal or destruction of the documents, records or registers of the association;

  • (j) on the application of a creditor, an inspector or the liquidator, an order giving directions on any matter arising in the liquidation;

  • (k) after notice has been given to all interested parties, an order relieving the liquidator from any omission or default on such terms as the court thinks fit and confirming any act of the liquidator;

  • (l) subject to sections 340 to 342, an order approving any proposed, interim or final distribution to members, in money or in property;

  • (m) an order disposing of any property belonging to members, shareholders or creditors who cannot be found;

  • (n) on the application of any director, officer, member, shareholder, creditor or the liquidator,

    • (i) an order staying the liquidation proceedings on such terms and conditions as the court thinks fit,

    • (ii) an order continuing or discontinuing the liquidation proceedings, or

    • (iii) an order to the liquidator to restore to the association all of its remaining property; and

  • (o) after the liquidator has rendered the liquidator’s final account to the court, an order directing the association to apply to the Minister for letters patent dissolving the association.

  • 1991, c. 48, s. 333
  • 2005, c. 54, s. 203(F)

Marginal note:Cessation of business and powers

  •  (1) Where a court makes an order for the liquidation of an association,

    • (a) the association continues in existence but shall cease to carry on business, except the business that is, in the opinion of the liquidator, required for an orderly liquidation; and

    • (b) the powers of the directors, members and shareholders, if any, are vested in the liquidator and cease to be vested in the directors, members or shareholders, except as specifically authorized by the court.

  • Marginal note:Delegation by liquidator

    (2) A liquidator may delegate any of the powers vested by paragraph (1)(b) to the directors, members or shareholders, if any.

Marginal note:Appointment of liquidator

 When making an order for the liquidation of an association or at any time thereafter, the court may appoint any person, including a director, an officer, a member or a shareholder of the association or any other association, as liquidator of the association.

Marginal note:Vacancy in liquidator’s office

 Where an order for the liquidation of an association has been made and the office of liquidator is or becomes vacant, the property of the association is under the control of the court until the office of liquidator is filled.

Marginal note:Duties of liquidator

  •  (1) A liquidator shall

    • (a) forthwith after appointment give notice thereof to the Superintendent and to each claimant and creditor of the association known to the liquidator;

    • (b) forthwith after appointment publish notice thereof once a week for four consecutive weeks in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the association has transacted any business within the preceding twelve months, requiring

      • (i) any person indebted to the association to render an account and pay to the liquidator at the time and place specified in the notice any amount owing,

      • (ii) any person possessing property of the association to deliver it to the liquidator at the time and place specified in the notice, and

      • (iii) any person having a claim against the association, whether liquidated, unliquidated, future or contingent, to present particulars thereof in writing to the liquidator not later than sixty days after the first publication of the notice;

    • (c) take into custody and control the property of the association;

    • (d) open and maintain a trust account for the moneys received by the liquidator in the course of the liquidation of the association;

    • (e) keep accounts of the moneys received and paid out by the liquidator in the course of the liquidation of the association;

    • (f) maintain separate lists of each class of persons having claims against the association;

    • (g) if at any time the liquidator determines that the association is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions;

    • (h) deliver to the court and to the Superintendent, at least once in every twelve month period after the liquidator’s appointment or more often as the court requires, the annual statement of the association prepared in accordance with subsection 292(1) or prepared in such manner as the liquidator thinks proper or as the court requires; and

    • (i) after the final accounts are approved by the court, distribute any remaining property of the association among the members or shareholders, according to their respective rights.

  • Marginal note:Powers of liquidator

    (2) A liquidator may

    • (a) retain lawyers, notaries, accountants, appraisers and other professional advisers;

    • (b) bring, defend or take part in any civil, criminal or administrative action or proceeding in the name and on behalf of the association;

    • (c) carry on the business of the association as required for an orderly liquidation;

    • (d) sell by public auction or private sale any property of the association;

    • (e) do all acts and execute documents in the name and on behalf of the association;

    • (f) borrow money on the security of the property of the association;

    • (g) settle or compromise any claims by or against the association; and

    • (h) do all other things necessary for the liquidation of the association and distribution of its property.

Marginal note:Due diligence

 A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

  • (a) financial statements of the association represented to the liquidator by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

  • 1991, c. 48, s. 338
  • 2005, c. 54, s. 204

Marginal note:Examination of others

  •  (1) Where a liquidator has reason to believe that any property of the association is in the possession or under the control of a person or that a person has concealed, withheld or misappropriated any such property, the liquidator may apply to the court for an order requiring that person to appear before the court at the time and place designated in the order and to be examined.

  • Marginal note:Restoration and compensation

    (2) Where an examination conducted pursuant to subsection (1) discloses that a person has concealed, withheld or misappropriated any property of the association, the court may order that person to restore the property or pay compensation to the liquidator.

Marginal note:Costs of liquidation

 A liquidator shall pay the costs of liquidation out of the property of the association and shall pay or make adequate provision for all claims against the association.

Marginal note:Final accounts

  •  (1) Within one year after the appointment of a liquidator and after paying or making adequate provision for all claims against the association, the liquidator shall apply to the court

    • (a) for approval of the final accounts of the liquidator and for an order permitting the distribution, in money or in kind, of the remaining property of the association to its members or shareholders, according to their respective rights; or

    • (b) for an extension of time, setting out the reasons therefor.

  • Marginal note:Member’s application

    (2) If a liquidator fails to make the application required by subsection (1), a member of the association may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

  • Marginal note:Notification of final accounts

    (3) A liquidator shall give notice of the liquidator’s intention to make an application under subsection (1) to the Superintendent, to each inspector appointed under section 333, to each member or shareholder of the association and to any person who provided a security or fidelity bond for the liquidation.

  • Marginal note:Publication

    (4) The liquidator shall publish the notice required under subsection (3) in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the association has transacted any business within the preceding twelve months or as otherwise directed by the court.

Marginal note:Final order

  •  (1) If the court approves the final accounts rendered by a liquidator, the court shall make an order

    • (a) directing the association to apply to the Minister for letters patent dissolving the association;

    • (b) directing the custody or disposal of the documents, records and registers of the association; and

    • (c) discharging the liquidator except in respect of the duty of a liquidator under subsection (2).

  • Marginal note:Delivery of order

    (2) The liquidator shall forthwith send a certified copy of the order referred to in subsection (1) to the Superintendent.

 
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