Canada Deposit Insurance Corporation Act

Marginal note:Order

• 39.13 (1) The Governor in Council may, on the recommendation of the Minister made under section 39.12, by order,

  • (a) vest the shares and subordinated debt of the federal member institution in the Corporation;

  • (b) appoint the Corporation as receiver in respect of the federal member institution; or

  • (c) direct the Minister to incorporate a federal institution designated in the order as a bridge institution and specify the date and time as of which the federal member institution’s deposit liabilities are assumed.

• Marginal note:Condition precedent

  (1.1) The making of an order, under paragraph (1)(b), appointing the Corporation as receiver of the federal member institution is a condition precedent to the making of an order under paragraph (1)(c) in respect of the federal member institution.

• Marginal note:Effects of vesting order

  (2) An order made under paragraph (1)(a)

  • (a) vests the shares and subordinated debt of the federal member institution in the Corporation free from any adverse claim, including any claim that a transfer was wrongful or that a particular adverse person was the owner of or had an interest in the shares or subordinated debt, even though the Corporation knows of the adverse claim;

  • (b) extinguishes any such adverse claim to the extent that the claim is a claim that a person other than the Corporation is the owner of or has an interest in the shares or subordinated debt;

  • (c) does not extinguish any such adverse claim to the extent that the claim is a personal claim against a person other than the Corporation or a person claiming under it; and

  • (d) does not prevent a secured creditor or assignee or successor in interest of the person who was the holder of the shares or subordinated debt immediately before the making of the order from being entitled to receive compensation under section 39.28 or 39.32.

• Marginal note:Federal credit union

  (2.1) In addition to subsection (2), if an order made under paragraph (1)(a) is in respect of a federal credit union, the Corporation has the powers, rights and privileges it would have if it were a member of the federal credit union and the federal credit union is exempt from any requirement to have a minimum number of members for so long as the shares are vested in the Corporation.

• Marginal note:Effects of receivership order

  (3) An order made under paragraph (1)(b)

  • (a) constitutes the Corporation as the exclusive receiver of the assets and undertaking of the federal member institution or of such part thereof as may be specified in the order;

  • (b) gives the Corporation, as receiver, in respect of the assets and undertaking of the federal member institution or such part thereof as may be specified in the order, the power to

    • (i) enter the federal member institution and take possession and control of the assets and require any person therein to account for and deliver up to the Corporation possession and control of the assets,

    • (ii) subject to subparagraph (iii), sell or otherwise dispose of the assets and undertaking by private or public sale or in such other manner and on such terms and conditions as the Corporation deems appropriate,

    • (iii) sell or otherwise dispose of any asset that is subject to an agreement creating a security interest to any person who agrees to assume the obligation secured by the security interest,

    • (iv) arrange for the assumption by any person of all or any part of the federal member institution’s liabilities,

    • (v) carry on the business of the federal member institution to the extent that the Corporation deems is necessary or beneficial to the receivership,

    • (vi) sue for, defend, compromise and settle, in the name of the federal member institution, any claim made by or against it,

    • (vii) in the name of the federal member institution, do all acts and execute all receipts and other documents and for that purpose, when necessary, use its seal, and

    • (viii) do all such other things as may be necessary or incidental to the exercise of the Corporation’s rights, powers, privileges and immunities as receiver; and

  • (c) gives the Corporation the right to recover out of the assets of the federal member institution all the costs, charges and expenses properly incurred by the Corporation in the receivership, in priority to all other claims.

• Marginal note:General, re orders

  (4) For greater certainty,

  • (a) shares and subordinated debt of a federal member institution that, immediately before the making of an order under paragraph (1)(a), are vested in a trustee in bankruptcy under the Bankruptcy and Insolvency Act are vested in the Corporation; and

  • (b) an order made under paragraph (1)(b) prevents any person, other than the Corporation, who is the holder of shares or subordinated debt of the federal member institution, and any secured creditor or assignee or successor in interest of such person, from exercising any voting or other rights attached to the shares or subordinated debt or arising from the holder’s status as such in any manner that would or might tend to defeat or interfere with the rights, powers, privileges and immunities of the Corporation as receiver.

• Marginal note:Receiver order dealings

  (5) Where an order is made under paragraph (1)(b),

  • (a) the Corporation, as receiver, may exercise its powers, rights, privileges and immunities without leave, approval or other intervention of a court, but may seek the assistance of a superior court in order to give effect to those powers, rights, privileges and immunities,

  • (b) an asset of the federal member institution that is acquired from the Corporation, as receiver, shall, except to the extent that it is an asset referred to in paragraph (3)(b)(iii), be acquired free of any adverse claim of the federal member institution or any other person, and

  • (c) the Corporation, as receiver, may cause or refrain from causing any obligation of the federal member institution to be performed and may cause the federal member institution to incur an obligation or do so on its behalf,

  and the Corporation shall not, by reason of its appointment as receiver or any action taken by it, be held to have assumed or incurred any obligation of the federal member institution for its own account.

• Marginal note:Non-liability — environmental matters

  (5.1) Without limiting the generality of subsection (5) and despite anything in federal or provincial law, the Corporation, as receiver, is not liable in that capacity for any environmental condition that arose or environmental damage that occurred

  • (a) before the Corporation’s appointment as receiver; or

  • (b) after the Corporation’s appointment as receiver unless it is established that the condition arose or the damage occurred as a result of the Corporation’s gross negligence or wilful misconduct or, in Quebec, the Corporation’s gross or intentional fault.

• Marginal note:Reports, etc., still required

  (5.2) Nothing in subsection (5.1) exempts the Corporation, as receiver, from any duty to report or make disclosure imposed by a law referred to in that subsection.

• Marginal note:Non-liability — certain orders

  (5.3) Without limiting the generality of subsection (5) and despite anything in federal or provincial law but subject to subsection (5.2), if an order is made that has the effect of requiring the Corporation, as receiver, to remedy any environmental condition or environmental damage affecting property involved in the receivership, the Corporation, as receiver, is not liable for failure to comply with the order, and is not liable for any costs that are or would be incurred by any person in carrying out the terms of the order,

  • (a) if, within the time that is specified in the order, or within 10 days after the appointment of the Corporation as receiver if the order is in effect when the Corporation is appointed as receiver, the Corporation, as receiver,

    • (i) complies with the order, or

    • (ii) on notice to the person who issued the order, abandons, disposes of or otherwise releases any interest in any real property, or any right in any immovable, affected by the condition or damage; or

  • (b) if the Corporation, as receiver, had, before the order was made, abandoned, disposed of or otherwise released any interest in any real property, or any right in any immovable, affected by the condition or damage.

• Marginal note:Non-liability — employees

  (5.4) Without limiting the generality of subsection (5) and despite anything in federal or provincial law, the Corporation, as receiver, is not liable in respect of a liability, including one as a successor employer,

  • (a) that is in respect of the employees or former employees of the federal member institution or a predecessor of the federal member institution or in respect of a pension plan for the benefit of those employees or former employees; and

  • (b) that existed before the Corporation is appointed as receiver or that is calculated by reference to a period before the Corporation’s appointment.

• Marginal note:Liability of other successor employers

  (5.5) Subsection (5.4) does not affect the liability of a successor employer other than the Corporation, as receiver.

• Marginal note:Order conclusive

  (6) An order of the Governor in Council under this section is for all purposes final and conclusive and shall not be questioned or reviewed in any court.