Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce

Issue 17 - Twelfth Report of the Committee

TUESDAY, February 4, 1997

The Standing Committee on Banking, Trade and Commerce has the honour to present its

TWELFTH REPORT

Your Committee, to which was referred Bill C-5, An Act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Income Tax Act has examined the said bill in obedience to its Order of Reference dated Thursday, October 31, 1996, and now reports the same with the following amendments:

Page 4, clause 2: Strike out line 8 and substitute the following:

"person occurs at the time or date".

Page 21, clause 30:

(a) Strike out line 4 and substitute the following:

"be just and equitable in the circumstances."

(b) Add the following after line 14:

"(18) Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the corporation shall be deemed to be a director for the purposes of this section.".

Page 30, clause 53: Strike out lines 7 to 9 and substitute the following:

"consumer debtor's circumstances that leads the administrator to conclude, after consultation with the debtor where practicable, that such change could jeopardize the consumer debtor's ability to meet the terms of the proposal, in writing, ".

Page 38, clause 65: Add after line 40 the following:

"(3) Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the corporation shall be deemed to be a director for the purposes of this section.".

Page 75, clause 118: Strike out line 27 and substitute the following:

"(C) for the firm's own account,".

Page 76, clause 118: Strike out line 6 and substitute the following:

"count, and

(iii) any investments of the securities firm in its subsidiaries that are not referred to in subparagraph (i) or (ii); and".

Page 84, clause 121: Strike out lines 1 to 4 and substitute the following:

"3. (1) This Act applies in respect of a debtor company or affiliated debtor companies where the total of claims, within the meaning of section 12, against the debtor company or affiliated debtor companies exceeds five million dollars.

(2) For the purposes of this Act,

(a) companies are affiliated companies if one of them is the subsidiary of the other or both are subsidiaries of the same company or each of them is controlled by the same person; and

(b) two companies affiliated with the same company at the same time are deemed to be affiliated with each other.

(3) For the purposes of this Act, a company is controlled by a person or by two or more companies if

(a) securities of the company to which are attached more than fifty per cent of the votes that may be cast to elect directors of the company are held, other than by way of security only, by or for the benefit of that person or by or for the benefit of those companies; and

(b) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the company.

(4) For the purposes of this Act, a company is a subsidiary of another company if

(a) it is controlled by
(i) that other company,

(ii) that other company and one or more companies each of which is controlled by that other company, or

(iii) two or more companies each of which is controlled by that other company; or

(b) it is a subsidiary of a company that is a subsidiary of that other company.".

Page 84, clause 122: Add after line 28 the following:

"(4) Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the debtor company shall be deemed to be a director for the purposes of this section.".

Page 86, clause 124: Strike out lines 21 to 30 and substitute the following:

"(4), the applicant also satisfies the court that the applicant has acted, and is acting, in good faith and with due diligence.".

Page 90, clause 124: Add after line 10 the following:

"(3) Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the company shall be deemed to be a director for the purposes of this section.".

Page 91, clause 124:

(a) Add after line 21 the following:

"(4) Where the monitor acts in good faith and takes reasonable care in preparing the report referred to in paragraph (3)(b), the monitor is not liable for loss or damage to any person resulting from that person's reliance on the report.".

(b) Strike out line 22 and substitute the following:

"(5) The debtor company shall".

Attached as an appendix to this Report are the observations and recommendations of your Committee on Bill C-5.

Respectfully submitted,

Michael J.L. Kirby

Chairman