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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)

Court-supervised Liquidation (continued)

Marginal note:Right to distribution of money

  •  (1) If in the course of the liquidation of an association the members resolve to, or the liquidator proposes to,

    • (a) exchange all or substantially all of the remaining property of the association for securities of another entity that are to be distributed to the members and shareholders, or

    • (b) distribute all or part of the remaining property of the association to the members and shareholders in kind,

    a member or shareholder may apply to the court for an order requiring the distribution of the remaining property of the association to be in money.

  • Marginal note:Powers of court

    (2) On an application under subsection (1), the court may order

    • (a) all of the remaining property of the association to be converted into and distributed in money; or

    • (b) the claim of any member or shareholder applying under this section to be satisfied by a distribution in money.

  • Marginal note:Order by court

    (3) Where an order is made by a court under paragraph (2)(b), the court

    • (a) shall fix a fair value on the share of the property of the association attributable to the member or shareholder;

    • (b) may in its discretion appoint one or more appraisers to assist the court in fixing a fair value in accordance with paragraph (a); and

    • (c) shall render a final order against the association in favour of the member or shareholder for the amount of the share of the property of the association attributable to the member or shareholder.

Marginal note:Dissolution by letters patent

  •  (1) On an application made pursuant to an order under paragraph 342(1)(a), the Minister may 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 date of the issuance of the letters patent.

General

Extended definitions of member and shareholder

 In sections 347 and 348, member and shareholder includes the personal representative of a member or shareholder, as the case may be.

Marginal note:Continuation of actions

  •  (1) Notwithstanding the dissolution of an association under this Part,

    • (a) a civil, criminal or administrative action or proceeding commenced by or against the association before its dissolution may be continued as if the association had not been dissolved;

    • (b) a civil, criminal or administrative action or proceeding may be brought against the association within two years after its dissolution as if the association had not been dissolved; and

    • (c) any property that would have been available to satisfy any judgment or order if the association had not been dissolved remains available for that purpose.

  • Marginal note:Service on association

    (2) Service of a document on an association after its dissolution may be effected by serving the document on a person shown as a director in the incorporating instrument of the association or, if applicable, in the latest return sent to the Superintendent under section 432.

Marginal note:Limitations on liability

  •  (1) Notwithstanding the dissolution of an association, a member or shareholder to whom any of its property has been distributed is liable to any person claiming under subsection 346(1) to the extent of the amount received by that member on the distribution.

  • Marginal note:Limitation

    (2) An action to enforce liability under subsection (1) may not be commenced except within two years after the date of the dissolution of the association.

  • Marginal note:Action against class

    (3) A court may order an action referred to in subsections (1) and (2) to be brought against the persons who were members, or shareholders, as a class, subject to such conditions as the court thinks fit.

  • Marginal note:Reference

    (4) If the plaintiff establishes a claim in an action under subsection (3), the court may refer the proceedings to a referee or other officer of the court who may

    • (a) add as a party to the proceedings each person found by the plaintiff to have been a member or shareholder;

    • (b) determine, subject to subsection (1), the amount that each person who was a member or shareholder must contribute towards satisfaction of the plaintiff’s claim; and

    • (c) direct payment of the amounts so determined.

Marginal note:Where person cannot be found

 Where a creditor, member or shareholder to whom property is to be distributed on the dissolution of an association cannot be found, the portion of the property to be distributed to that creditor, member or shareholder shall be converted into money and paid in accordance with section 350.

Marginal note:Vesting in Crown

 Subject to subsection 346(1) and sections 350 and 351, property of an association that has not been disposed of at the date of the dissolution of the association vests in Her Majesty in right of Canada.

Marginal note:Unclaimed money on winding-up

  •  (1) Notwithstanding the Winding-up and Restructuring Act, where the business of an association is being wound up, the liquidator or the association shall pay to the Minister on demand and in any event before the final winding-up of that business any amount that is payable by the liquidator or the association to a creditor, member or shareholder of the association to whom payment thereof has not, for any reason, been made.

  • Marginal note:Records

    (2) Where a liquidator or an association makes a payment to the Minister under subsection (1) with respect to a creditor, member or shareholder, the liquidator or association shall concurrently forward to the Minister all documents, records and registers in the possession of the liquidator or association that relate to the entitlement of the creditor, member or shareholder.

  • Marginal note:Payment to Bank of Canada

    (3) The Minister shall pay to the Bank of Canada all amounts paid to the Minister under subsection (1) and shall provide the Bank of Canada with any document, record or register received by the Minister under subsection (2).

  • Marginal note:Liquidator and association discharged

    (4) Payment by a liquidator or an association to the Minister under subsection (1) discharges the liquidator and the association in respect of which the payment is made from all liability for the amount so paid, and payment by the Minister to the Bank of Canada under subsection (3) discharges the Minister from all liability for the amount so paid.

  • 1991, c. 48, s. 350
  • 1996, c. 6, s. 167

Marginal note:Liability of Bank of Canada

  •  (1) Subject to section 22 of the Bank of Canada Act, where payment has been made to the Bank of Canada of an amount under subsection 350(3), the Bank of Canada, if payment is demanded by a person who, but for subsection 350(4), would be entitled to receive payment of that amount from the liquidator, the association or the Minister, is liable to pay to that person at its head office an amount equal to the amount so paid to it, with interest thereon for the period, not exceeding ten years, from the day on which the payment was received by the Bank of Canada until the date of payment to the person, at such rate and computed in such manner as the Minister determines.

  • Marginal note:Enforcing liability

    (2) The liability of the Bank of Canada under subsection (1) may be enforced by action against the Bank of Canada in the court in the province in which the debt or instrument was payable.

Marginal note:Custody of records after dissolution

 A person who has been granted custody of the documents, records and registers of a dissolved association shall keep them available for production for six years following the date of the dissolution of the association or until the expiration of such shorter period as may be ordered by the court when it orders the dissolution.

Marginal note:Insolvency

  •  (1) In the case of the insolvency of an association,

    • (a) the payment of any amount due to Her Majesty in right of Canada, in trust or otherwise, except indebtedness evidenced by subordinated indebtedness, shall be a first charge on the assets of the association;

    • (b) the payment of any amount due to Her Majesty in right of a province, in trust or otherwise, except indebtedness evidenced by subordinated indebtedness, shall be a second charge on the assets of the association;

    • (c) the payment of the deposit liabilities of the association and all other liabilities of the association, except the liabilities referred to in paragraphs (d) and (e), shall be a third charge on the assets of the association;

    • (d) subordinated indebtedness of the association and all other liabilities that by their terms rank equally with or subordinate to such subordinated indebtedness shall be a fourth charge on the assets of the association; and

    • (e) the payment of any fines and penalties for which the association is liable shall be a last charge on the assets of the association.

  • Marginal note:Priority not affected

    (2) Nothing in subsection (1) prejudices or affects the priority of any holder of any security interest in any property of an association.

  • Marginal note:Priorities

    (3) Priorities within each of paragraphs (1)(a) to (e) shall be determined in accordance with the laws governing priorities and, where applicable, by the terms of the indebtedness and liabilities referred to therein.

  • 1991, c. 48, s. 353
  • 2001, c. 9, s. 296

PART VIIIOwnership

DIVISION IConstraints on Ownership

Marginal note:Constraining acquisition

  •  (1) No person, or entity controlled by a person, shall, without the approval of the Minister, purchase or otherwise acquire any share of an association or purchase or otherwise acquire control of any entity that holds any share of an association if

    • (a) the acquisition would cause the person to have a significant interest in any class of shares of the association; or

    • (b) where the person has a significant interest in a class of shares of the association, the acquisition would increase the significant interest of the person in that class of shares.

  • Marginal note:Amalgamation, etc., constitutes acquisition

    (2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares of an association, the entity is deemed to be acquiring a significant interest in that class of shares of the association through an acquisition for which the approval of the Minister is required under subsection (1).

  • Marginal note:Exemption

    (3) On application by an association, the Superintendent may exempt from the application of this section and section 355 any class of shares of the association that do not amount to more than 30% of the equity of the association.

  • Definition of equity

    (4) For the purposes of this section, equity, in respect of an association, means its equity as determined in accordance with the regulations.

  • 1991, c. 48, s. 354
  • 1993, c. 34, s. 54
  • 2001, c. 9, s. 297
  • 2007, c. 6, s. 158

Marginal note:No acquisition of control without approval

  •  (1) No person shall acquire control, within the meaning of paragraph 3(1)(e), of an association without the approval of the Minister.

  • Marginal note:Amalgamation, etc., constitutes acquisition

    (2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)(e), an association, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the association through an acquisition for which the approval of the Minister is required under subsection (1).

  • 2001, c. 9, s. 298
  • 2007, c. 6, s. 159

Marginal note:Constraining registration

 No association shall, unless the acquisition of the share has been approved by the Minister, record in its securities register a transfer or issue of any share of the association to any person or to any entity controlled by a person if

  • (a) the transfer or issue of the share would cause the person to have a significant interest in any class of shares of the association; or

  • (b) where the person has a significant interest in a class of shares of the association, the transfer or issue of the share would increase the significant interest of the person in that class of shares of the association.

Marginal note:Exception for small holdings

 Notwithstanding section 355, where, as a result of a transfer or issue of shares of a class of shares of an association to a person, the total number of shares of that class registered in the securities register of the association in the name of that person

  • (a) would not exceed five thousand, and

  • (b) would not exceed 0.1 per cent of the outstanding shares of that class,

the association is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares of the association as a result of that issue or transfer of shares.

  • 1994, c. 47, s. 53

Marginal note:Where approval not required

  •  (1) Notwithstanding subsections 354(1) and (2) and section 355, approval of the Minister is not required where a person with a significant interest in a class of shares of an association or an entity controlled by a person with a significant interest in a class of shares of an association

    • (a) purchases or otherwise acquires shares of that class, or

    • (b) acquires control of any entity that holds any share of that class,

    and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the association to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

  • Marginal note:Percentage

    (2) Subject to subsection (3), for the purposes of subsection (1), the percentage is 5 percentage points in excess of the significant interest of the person in that class of shares of the association on the later of the day this Part comes into force and the day of the most recent purchase or other acquisition by

    • (a) the person, or

    • (b) any entity controlled by the person, other than the entity referred to in paragraph (1)(b),

    of shares of that class of shares of the association, or of control of an entity that held shares of that class of shares of the association, for which approval was given by the Minister.

  • Marginal note:Idem

    (3) Where a person has a significant interest in a class of shares of an association and the person’s percentage of that class has decreased after the date of the most recent purchase or other acquisition by

    • (a) the person, or

    • (b) any entity controlled by the person, other than the entity referred to in paragraph (1)(b),

    of shares of that class of shares of the association, or of control of an entity that held shares of that class of shares of the association, for which approval was given by the Minister, the percentage for the purposes of subsection (1) is the percentage that is the lesser of

    • (c) 5 percentage points in excess of the significant interest of the person in that class of shares of the association on the later of the day this Part comes into force and the day of the most recent purchase or other acquisition by

      • (i) the person, or

      • (ii) any entity controlled by the person, other than the entity referred to in paragraph (1)(b),

      of shares of that class of shares of the association, or of control of an entity that held shares of that class of shares of the association, for which approval was given by the Minister, and

    • (d) 10 percentage points in excess of the lowest significant interest of the person in that class of shares of the association at any time after the later of the day this Part comes into force and the day of the most recent purchase or other acquisition by

      • (i) the person, or

      • (ii) any entity controlled by the person, other than the entity referred to in paragraph (1)(b),

      of shares of that class of shares of the association, or of control of an entity that held shares of that class of shares of the association, for which approval was given by the Minister.

  • Marginal note:Exception

    (4) Subsection (1) does not apply if the purchase or other acquisition of shares or the acquisition of control referred to in that subsection would

    • (a) result in the acquisition of a significant interest in a class of shares of the association by an entity controlled by the person and the acquisition of that investment is not exempted by the regulations; or

    • (b) result in an increase in a significant interest in a class of shares of the association by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies, and the increase is not exempted by the regulations.

  • Marginal note:Regulations

    (5) The Governor in Council may make regulations

    • (a) exempting from the application of paragraph (4)(a) the acquisition of a significant interest in a class of shares of the association by an entity controlled by the person; and

    • (b) exempting from the application of paragraph (4)(b) an increase in a significant interest in a class of shares of the association by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies.

  • 1991, c. 48, s. 356
  • 1997, c. 15, s. 136
 
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