Raymond Chabot Inc. — October 22, 2004

In re:

Raymond Chabot Inc.,
Holder of a Corporate Trustee Licence
For the Province of Quebec

Decision Rendered Pursuant to the Bankruptcy and Insolvency Act

Whereas a general audit of the office of Raymond Chabot Inc. in Sherbrooke was conducted in October 2000 by a senior evaluation officer of the Office of the Superintendent of Bankruptcy (OSB);

Whereas pursuant to that general audit the senior analyst, professional conduct, of the OSB, in accordance with the general delegation of powers in section 14.02(1) of the Bankruptcy and Insolvency Act (the Act), submitted a report on the conduct of the individual trustees Yves Guay and Pierre Guay and the corporate trustee Raymond Chabot Inc.;

Whereas the corporate trustee admitted the facts set forth in that report, subject to certain qualifications;

Whereas the balance of $14,330.68 in the "Normand Bourque Syndic Ltée (interest)" account and the interest on the bank account known as "RC Inc. in trust", representing the sum of $471.39, has been paid to the Receiver General in its entirety;

Whereas the corporate trustee undertook to pay to the Receiver General an amount equal to the interest lost by the estate files included in the file [TRANSLATION] "consultation fees", namely the sum of $689.63;

Whereas the corporate trustee has already paid or undertaken to pay all the fees that were not processed in the usual way, that is the sums of $4,029.33 and $350 respectively;

Whereas the corporate trustee cooperated with the investigation;

Whereas Yves Guay has no longer been associated with and/or an employee of Raymond Chabot Inc. since 2002;

Whereas Pierre Guay has agreed to leave Raymond Chabot Inc.;

Whereas the corporate trustee is responsible for the actions of individual trustees designated to administer estates;

Whereas the following infractions alleged in the report were established against the corporate trustee Raymond Chabot Inc., namely that it:

  • failed to perform its duty to ensure that the management of estate funds and banking operations complied with the requirements in the Superintendent of Bankruptcy's Directive No. 5 on Estate Funds and Banking;
  • did not ensure that each consolidated account in trust was given prior approval by the Division Assistant Superintendent, thereby contravening the Superintendent of Bankruptcy's Directive No. 5 on Estate Funds and Banking;
  • did not adequately control the consolidated trust account in the summary administration files, which could have shown that this account contained files that were not summary administration files, namely the [TRANSLATION] "consultation fees", "summary bankruptcies, disbursements", "Normand Bourque Syndic Ltée (interest)" and "Normand Bourque Syndic Ltée" files;
  • did not ensure that the [TRANSLATION] "consultation fees" and "Normand Bourque Syndic Ltée (interest)" files did not include receipts relating to various bankruptcy files;
  • deposited unauthorized fees in the files of Nicole Breton ($1,100), Richard Keays ($1,500), Pierre Sirois Construction Inc. ($779.33), Marion Thibault ($150), Réal Audet ($500) and Pierre Lessard ($350);
  • deposited fees of $1,500 in the file of Richard Keays, contrary to the judgment by the Court ordering the corporate trustee to repay this amount to the debtor;
  • did not ensure that a balance of $14,330.68 in the "Normand Bourque Syndic Ltée (interest)" file, most of which came from additional receipts cashed since 1994, in closed files acquired from Estate Normand Bourque Syndic Ltée, were processed promptly and in accordance with the Act, Rules, Directives and Instructions of the Superintendent of Bankruptcy;
  • did not have in place an internal audit program or adequate control procedure which could detect the aforesaid irregularities, which took place during the period from 1994 to 2000;

Whereas, in view of all the facts and circumstances mentioned, the undersigned does not feel it is advisable or in the public interest to modify or reject the modified recommendation of the senior analyst, professional conduct, giving rise to the penalty accepted on all sides and described herein;

I the undersigned, as delegate of the Superintendent of Bankruptcy, in accordance with the powers conferred on me pursuant to section 14.01(2) of the Act, approve the following agreement and order the following:

  1. the licence of Raymond Chabot Inc., corporate trustee, be restricted for a period of two months from November 15, 2004, during which the corporate trustee may not file any new bankruptcy pursuant to the Act in the district of St-François and Drummondville;
  2. if the trustee does not comply with the restriction imposed on its licence in this order, it shall be in default pursuant to section 13.2(5)(b) of the Act;
  3. each duplicate original of this ORDER signed by the undersigned delegate shall have the same force and effect and may be used as such for all legal purposes.

Signet at Montréal, Quebec on October 22, 2004.

Original signed by

(signed)


Hon. Benjamin J. Greenberg, Q.C.
Delegate of Superintendent of Bankruptcy



This document has been reproduced as submitted by the delegate of the Superintendent of Bankruptcy.