Winding-up and Restructuring Act (R.S.C., 1985, c. W-11)

Marginal note:Provisional liquidator

28 A court may, on the presentation of a petition for a winding-up order or at any time thereafter and before the first appointment of a liquidator, appoint provisionally a liquidator of the estate and effects of the company and may limit and restrict his powers by the order appointing him.

Marginal note:Incorporated company

29 An incorporated company may be appointed liquidator to the goods and effects of a company under this Act, and if an incorporated company is so appointed, it may act through one or more of its principal officers designated by the court.

Marginal note:Trust company

30 Where under the laws of any province a trust company is accepted by the courts of that province and is permitted to act as administrator, assignee or curator without giving security, the trust company may be appointed liquidator of a company under this Act, without giving security.

Marginal note:Powers of directors

31 On the appointment of a liquidator, all the powers of the directors of the company cease, except in so far as the court or the liquidator sanctions the continuance of those powers.

Marginal note:Resignation and removal

32 A liquidator may resign or may be removed by the court on due cause shown, and every vacancy in the office of liquidator shall be filled by the court.

Powers and Duties of Liquidators

Marginal note:Duties after appointment

33 A liquidator, on his appointment, shall take into his custody or under his control all the property, effects and choses in action to which the company is or appears to be entitled, and shall perform such duties with reference to winding-up the business of the company as are imposed by the court or by this Act.

Marginal note:Liquidator to prepare statement

34 A liquidator shall, within 120 days after appointment, prepare a statement of the assets, debts and liabilities of the company and of the value of those assets as shown by the books and records of the company.

Marginal note:Powers

• 35 (1) A liquidator may, with the approval of the court, and on such previous notice to the creditors, contributories, shareholders or members of the company as the court orders,

  • (a) bring or defend any action, suit or prosecution or other legal proceeding, civil or criminal, in his own name as liquidator or in the name or on behalf of the company, as the case may be;

  • (b) carry on the business of the company so far as is necessary to the beneficial winding-up of the company;

  • (c) sell the real and personal property, effects and choses in action of the company, by public auction or private contract, and transfer the whole thereof to any person or company, or sell them in parcels for such consideration as may be approved by the court;

  • (d) do all acts and execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose use, when necessary, the seal of the company;

  • (e) prove, rank, claim and draw dividends in the matter of the bankruptcy, insolvency or sequestration of any contributory, for any sum due the company from the contributory, and take and receive dividends in respect of the sum in the matter of the bankruptcy, insolvency or sequestration, as a separate debt due from that contributory and rateably with the other separate creditors;

  • (f) draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company;

  • (g) raise on the security of the assets of the company any requisite sum or sums of money;

  • (h) do and execute all such other things as are necessary for winding-up the affairs of the company and distributing its assets; and

  • (i) enter into an agreement with any compensation association designated by order of the Minister of Finance pursuant to section 449 or 591 of the Insurance Companies Act in order to facilitate the payment of claims to policyholders and the preservation of the value of the estate.

• Marginal note:Agreement provisions

  (1.1) An agreement referred to in paragraph (1)(i) may include provisions setting out the priority for repayment to the compensation association of amounts advanced by it to a company in accordance with the agreement.

• Marginal note:Company liable

  (2) The drawing, accepting, making or endorsing of every bill of exchange or promissory note mentioned in subsection (1), on behalf of the company, has the same effect, with respect to the liability of the company, as if the bill or note had been drawn, accepted, made or endorsed by or on behalf of the company in the course of the carrying on of its business.

• Marginal note:No delivery of assets needed

  (3) No delivery of the whole or of any part of the assets of the company is necessary to give a lien to any person taking security on the assets of the company.

Marginal note:Liquidator not liable

35.1 A liquidator is not liable to any person if the liquidator relies in good faith on an opinion, report or statement of a compensation association regarding its financial obligations in relation to an agreement referred to in paragraph 35(1)(i).

Marginal note:Appointment of solicitor

36 A liquidator may, with the approval of the court, appoint a solicitor or law agent to assist him in the performance of his duties.

Marginal note:Debts due to the company

• 37 (1) A liquidator may, with the approval of the court, compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, demands and matters in dispute in any way relating to or affecting the assets of the company or the winding-up of the company, on the receipt of such sums, payable at such times, and generally on such terms, as are agreed on.

• Marginal note:Security may be taken

  (2) A liquidator may take any security for the discharge of the calls, debts, liabilities, claims, demands or disputed matters referred to in subsection (1), and give a complete discharge in respect of all or any of those calls, debts, liabilities, claims, demands or matters.

Marginal note:Creditors may be compromised

38 A liquidator may, with the approval of the court, make any compromise or arrangements that the liquidator considers appropriate with

• (a) in the case of a company other than an authorized foreign bank, creditors or persons claiming to be creditors of the company; and

• (b) in the case of an authorized foreign bank, creditors or persons claiming to be creditors of the authorized foreign bank or persons who hold security on its assets.

Marginal note:Court may provide as to powers

39 A court may provide, by any order subsequent to a winding-up order, that a liquidator may exercise any of the powers conferred on him by this Act, without the sanction or intervention of the court.

40 [Repealed, 1996, c. 6, s. 149]

Appointment of Inspectors

Marginal note:Inspectors

41 A court may appoint, at any time when found advisable, one or more inspectors, whose duty it is to assist and advise a liquidator in the liquidation of a company.

Remuneration of Liquidators and Inspectors

Marginal note:Remuneration

• 42 (1) A liquidator shall be paid such salary or remuneration, by way of percentage or otherwise, as the court directs, on such notice to the creditors, contributors, shareholders or members as the court orders.

• Marginal note:Distribution

  (2) If there is more than one liquidator appointed for the liquidation of a company, the remuneration shall be distributed among them in such proportions as the court directs.

Marginal note:Remuneration of inspectors

43 The court shall determine the remuneration, if any is deemed just, of inspectors.

44 to 47 [Repealed, 1996, c. 6, s. 150]

Court Discharging Functions of Liquidator

Marginal note:If no liquidator

48 If at any time no liquidator has been appointed to wind up the business of a company, all the property of the company shall be deemed to be in the custody of the court.

Marginal note:Provision for discharge of liquidator

• 49 (1) Whenever a company is being wound up and the realization and distribution of its assets has proceeded so far that in the opinion of the court it becomes expedient that the liquidator should be discharged, and that the balance remaining in his hands of the moneys and assets of the company can be better realized and distributed by the court, the court may make an order discharging the liquidator and for payment, delivery and transfer into court, or to such officer or person as the court may direct, of those moneys and assets, and the moneys and assets shall be realized and distributed, by or under the direction of the court, among the persons entitled thereto, in the same way, as nearly as may be, as if the distribution were being made by the liquidator.

• Marginal note:Disposal of books and documents

  (2) In the case described in subsection (1), the court may make an order directing how the books, accounts and documents of the company and of the liquidator may be disposed of, and may order that they be deposited in court or otherwise dealt with as may be thought fit.

Contributories

Marginal note:List of contributories

50 As soon as possible after the commencement of the winding-up of a company, the court shall settle a list of contributories.

Marginal note:Classes distinguished

51 In the list of contributories referred to in section 50, persons who are contributories in their own right shall be distinguished from persons who are contributories as representatives of or liable for the debts of others.

Marginal note:Adding heirs to list

52 It is not necessary, where the personal representative of any deceased contributory is placed on a list of contributories, to add the heirs or devisees of the contributory, but the heirs or devisees may be added as and when the court thinks fit.

Marginal note:Liability of shareholders

• 53 (1) Every shareholder or member of a company or his representative is liable to contribute the amount unpaid on his shares of the capital or on his liability to the company, or to its members or creditors, as the case may be, under the Act, charter or instrument of incorporation of the company, or otherwise.

• Marginal note:Liability an asset

  (2) The amount that a shareholder is liable to contribute under subsection (1) shall be deemed an asset of the company, and a debt due to the company, payable as directed or appointed under this Act.

Marginal note:Liability after transfer of shares

• 54 (1) Where a shareholder has transferred his shares under circumstances that do not, by law, free him from liability in respect thereof, or where he is by law liable to the company or its members or creditors, as the case may be, to an amount beyond the amount unpaid on his shares, he shall be deemed a member of the company for the purposes of this Act and is liable to contribute, under subsection 53(1), to the extent of his liabilities to the company or its members or creditors, independently of this Act.

• Marginal note:An asset

  (2) The amount that a shareholder is liable to contribute under subsection (1) shall be deemed an asset and a debt described in subsection 53(2).

Marginal note:Liability of contributory a debt

55 The liability of any person to contribute to the assets of a company under this Act, in the event of the business of the company being wound up, creates a debt accruing due from that person at the time when his liability commenced, but payable at the time or respective times when calls are made, under this Act, for enforcing that liability.

Marginal note:Provable against his estate

56 In the case of the bankruptcy or insolvency of any contributory, the estimated value of his liability to future calls, as well as calls already made, may be proved against his estate.

Marginal note:Handing over money and books

57 A court may, at any time after making a winding-up order, require any contributory for the time being settled on the list of contributories as trustee, receiver, banker, agent or officer of the company, to pay, deliver, convey, surrender or transfer forthwith, or within such time as the court directs, to or into the hands of the liquidator, any sum or balance, books, papers, estate or effects that are in his hands for the time being, and to which the company appears to be entitled.

Marginal note:Payment by contributory

58 A court may, at any time after making a winding-up order, make an order on any contributory for the time being settled on the list of contributories, directing payment to be made, in the manner mentioned in the order, of any moneys due from him or from the estate of the person whom he represents to the company, exclusive of any moneys that he or the estate of the person whom he represents is liable to contribute by virtue of any call made in pursuance of this Act.

Marginal note:Calls on contributories

59 A court may, at any time after making a winding-up order, and either before or after it has ascertained the sufficiency of the assets of the company, make calls on and order payment thereof by all or any of the contributories for the time being settled on the list of contributories, to the extent of their liability, for payment of all or any sums it deems necessary to satisfy the debts and liabilities of the company, for the costs, charges and expenses of winding-up and for the adjustment of the rights of the contributories among themselves.

Marginal note:Consideration of possible failure to pay

• 60 (1) A court may, in making a call, take into consideration the probability that some of the contributories on whom the call is made may partly or wholly fail to pay their respective portions of the call.

• Marginal note:Maturity of debt

  (2) No call compels payment of a debt before the maturity thereof and the extent of the liability of any contributory is not increased by anything in this section.