347. (1) The Superintendent or any interested person may, at any time during the liquidation of a bank, 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 348 to 360 and on such application the court may so order and make any further order it thinks fit.

(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.

(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.

348. (1) When a court makes an order under subsection 347(1), the liquidation of the bank shall continue under the supervision of the court.

(2) The supervision of the liquidation of a bank by the court pursuant to an order made under subsection 347(1) commences on the day the order is made.

349. In connection with the liquidation and dissolution of a bank, the court may, where it is satisfied that the bank 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 bank;

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

(i) exercising any of their powers, or

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

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

(i) to the bank, or

(ii) for an obligation of the bank;

(h) an order approving the payment, satisfaction or compromise of claims against the bank 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 bank, 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 bank;

(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 356 to 358, an order approving any proposed, interim or final distribution to shareholders, if any, or incorporators, in money or in property;

(m) an order disposing of any property belonging to creditors, shareholders and incorporators who cannot be found;

(n) on the application of any director, officer, shareholder, incorporator, 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 bank all of its remaining property; and

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

1991, c. 46, s. 349; 2005, c. 54, s. 77(F).

350. (1) Where a court makes an order for the liquidation of a bank,

(a) the bank 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 and shareholders, if any, are vested in the liquidator and cease to be vested in the directors or shareholders, except as specifically authorized by the court.

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

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

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

353. (1) A liquidator shall

(a) forthwith after appointment give notice thereof to the Superintendent and to each claimant and creditor of the bank 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 bank has transacted any business within the preceding twelve months, requiring

(i) any person indebted to the bank 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 bank to deliver it to the liquidator at the time and place specified in the notice, and

(iii) any person having a claim against the bank, 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 bank;

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

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

(f) maintain separate lists of each class of creditors, shareholders and other persons having claims against the bank;

(g) if at any time the liquidator determines that the bank 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 bank prepared in accordance with subsection 308(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 bank among the shareholders, if any, or incorporators, according to their respective rights.

(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 bank;

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

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

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

(f) borrow money on the security of the property of the bank;

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

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

354. 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 bank represented to the liquidator by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or

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

1991, c. 46, s. 354; 2005, c. 54, s. 78.

355. (1) Where a liquidator has reason to believe that any property of the bank 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.

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

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

357. (1) Within one year after the appointment of a liquidator and after paying or making adequate provision for all claims against the bank, 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 bank to its shareholders, if any, or to the incorporators, according to their respective rights; or

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

(2) If a liquidator fails to make the application required by subsection (1), a shareholder of the bank or, if there are no shareholders of the bank, an incorporator may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

(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 349, to each shareholder of the bank or, if there are no shareholders, to each incorporator and to any person who provided a security or fidelity bond for the liquidation.

(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 bank has transacted any business within the preceding twelve months or as otherwise directed by the court.

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

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

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

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

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

359. (1) If in the course of the liquidation of a bank the shareholders resolve to, or the liquidator proposes to,

(a) exchange all or substantially all of the remaining property of the bank for securities of another entity that are to be distributed to the shareholders or to the incorporators, or

(b) distribute all or part of the remaining property of the bank to the shareholders or to the incorporators in kind,

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

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

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

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

(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 bank attributable to the shareholder or incorporator;

(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 bank in favour of the shareholder or incorporator for the amount of the share of the property of the bank attributable to the shareholder or incorporator.

360. (1) On an application made pursuant to an order under paragraph 358(1)(a), the Minister may issue letters patent dissolving the bank.

(2) A bank 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.

361. In sections 363 and 364, “shareholder” and “incorporator” include the heirs and personal representatives of a shareholder or incorporator.

362. (1) Notwithstanding the dissolution of a bank under this Part,

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

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

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

(2) Service of a document on a bank after its dissolution may be effected by serving the document on a person shown as a director in the incorporating instrument of the bank or, if applicable, in the latest return sent to the Superintendent under section 632.

1991, c. 46, s. 362; 1999, c. 28, s. 17.

363. (1) Notwithstanding the dissolution of a bank, a shareholder or incorporator to whom any of its property has been distributed is liable to any person claiming under subsection 362(1) to the extent of the amount received by that shareholder or incorporator on the distribution.

(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 bank.

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

(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 shareholder or incorporator;

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

(c) direct payment of the amounts so determined.

364. Where a creditor, shareholder or incorporator to whom property is to be distributed on the dissolution of a bank cannot be found, the portion of the property to be distributed to that creditor, shareholder or incorporator shall be converted into money and paid in accordance with section 366.

365. Subject to subsection 362(1) and sections 366 and 367, property of a bank that has not been disposed of at the date of the dissolution of the bank vests in Her Majesty in right of Canada.

366. (1) Notwithstanding the Winding-up and Restructuring Act, where the business of a bank is being wound up, the liquidator or the bank 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 bank to a creditor, shareholder or incorporator of the bank to whom payment thereof has not, for any reason, been made.

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

(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).

(4) Payment by a liquidator or a bank to the Minister under subsection (1) discharges the liquidator and the bank 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. 46, s. 366; 1996, c. 6, s. 167.

367. (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 366(3), the Bank of Canada, if payment is demanded by a person who, but for subsection 366(4), would be entitled to receive payment of that amount from the liquidator, the bank 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.

(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.

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

369. (1) In the case of the insolvency of a bank,

(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 bank;

(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 bank;

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

(d) subordinated indebtedness of the bank 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 bank; and

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

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

(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. 46, s. 369; 2001, c. 9, s. 95.