name: Winding-up and Restructuring Act
unofficial_text: # Winding-up and Restructuring Act
  
  RSC 1985, c W-11
  
  An Act respecting the winding-up and restructuring of companies
  
  ## Short Title 
  
  ### Short title
  
  1 This Act may be cited as the Winding-up and Restructuring Act.  
  
  ## Interpretation 
  
  ### Definitions
  
  2 (1) In this Act,  
  *aircraft objects* [Repealed, 2012, c. 31, s. 422]   
  *assets* means  
  (a) in respect of a foreign insurance company, the assets in Canada, within the meaning of subsection 2(1) of the Insurance Companies Act, of the foreign insurance company together with its other assets held in Canada under the control of its chief agent, within the meaning of section 571 of that Act, including all amounts received or receivable in respect of its insurance business in Canada, and  
  (b) in respect of an authorized foreign bank, assets within the meaning of section 618 of the Bank Act ; (actif ou éléments d’actif)   
  *authorized foreign bank* has the same meaning as in section 2 of the Bank Act ; (banque étrangère autorisée)   
  *capital stock* includes a capital stock de jure or de facto ; (capital social)   
  *company* includes any corporation subject to this Act; (compagnie)   
  *contributory* means a person liable to contribute to the assets of a company under this Act, and, in all proceedings for determining the persons who are to be deemed contributories and in all proceedings prior to the final determination of those persons, it includes any person alleged to be a contributory; (contributeur)   
  *court* means  
  (a) in Nova Scotia, British Columbia and Prince Edward Island, the Supreme Court, 
  (a.1) in Ontario, the Superior Court of Justice, 
  (b) in Quebec, the Superior Court, 
  (c) in New Brunswick, Manitoba, Saskatchewan and Alberta, the Court of Queen’s Bench, 
  (c.1) in Newfoundland and Labrador, the Trial Division of the Supreme Court, and 
  (d) in Yukon and the Northwest Territories, the Supreme Court, and in Nunavut, the Nunavut Court of Justice; ( tribunal)   
  *creditor* includes all persons having any claim against a company, present or future, certain, ascertained or contingent, for liquidated or unliquidated damages, and in all proceedings for determining the persons who are to be deemed creditors, it includes any person making any such claim; (créancier)   
  *federal credit union* has the same meaning as in section 2 of the Bank Act ; (coopérative de crédit fédérale)   
  *financial institution* has the same meaning as in section 3 of the Office of the Superintendent of Financial Institutions Act ; (institution financière)   
  *foreign insurance company* means an insurance company that is authorized under Part XIII of the Insurance Companies Act to insure in Canada risks; (société étrangère)   
  *insurance company* means a company transacting the business of insurance and includes any unincorporated association or reciprocal exchange transacting that business; (compagnie d’assurance)   
  *Minister* [Repealed, 1999, c. 28, s. 76]   
  *official gazette* means the Canada Gazette and the gazette published under the authority of the government of the province where the proceedings for the winding-up of the business of a company are carried on, or used as the official means of communication between the lieutenant governor of that province and the people, and if no such gazette is published in the province, any newspaper published in the province and designated by a court for publishing the notices required by this Act; (gazette officielle)   
  *Superintendent* means the Superintendent of Financial Institutions appointed pursuant to subsection 5(1) of the Office of the Superintendent of Financial Institutions Act and a reference to the “Office of the Superintendent” shall be construed as a reference to the office established by section 4 of that Act; (surintendant)   
  *trading company* means any company, except a railway or telegraph company, carrying on business similar to that carried on by apothecaries, auctioneers, bankers, brokers, brickmakers, builders, carpenters, carriers, cattle or sheep salesmen, coach proprietors, dyers, fullers, keepers of inns, taverns, hotels, saloons or coffee houses, lime burners, livery stable keepers, market gardeners, millers, miners, packers, printers, quarrymen, sharebrokers, ship-owners, shipwrights, stockbrokers, stock-jobbers, victuallers, warehousemen, wharfingers, persons using the trade of merchandise by way of bargaining, exchange, bartering, commission, consignment or otherwise, in gross or by retail, or by persons who, either for themselves, or as agents or factors for others, seek their living by buying and selling or buying and letting for hire goods or commodities, or by the manufacture, workmanship or the conversion of goods or commodities or trees; (compagnie de commerce)   
  *winding-up order* means an order granted by a court under this Act to wind up the business of a company, and includes any order granted by the court to bring under this Act any company in liquidation or in process of being wound up. (ordonnance de mise en liquidation)  
  
  ### Business in Canada
  
  (2) For the purposes of this Act, a reference to the business in Canada of an authorized foreign bank is deemed to be a reference to the business in Canada of the authorized foreign bank under Part XII.1 of the Bank Act.  
  
  ### Creditors
  
  (3) For the purposes of this Act, a reference to a creditor in respect of an authorized foreign bank is deemed to be a reference to a creditor of the authorized foreign bank in respect of its business in Canada. 
  
  ### When company deemed insolvent
  
  3 A company is deemed insolvent 
  (a) if it is unable to pay its debts as they become due; 
  (b) if it calls a meeting of its creditors for the purpose of compounding with them; 
  (c) if it exhibits a statement showing its inability to meet its liabilities; 
  (d) if it has otherwise acknowledged its insolvency; 
  (e) if it assigns, removes or disposes of, or attempts or is about to assign, remove or dispose of, any of its property, with intent to defraud, defeat or delay its creditors, or any of them; 
  (f) if, with the intent referred to in paragraph (e), it has procured its money, goods, chattels, land or property to be seized, levied on or taken, under or by any process of execution; 
  (g) if it has made any general conveyance or assignment of its property for the benefit of its creditors, or if, being unable to meet its liabilities in full, it makes any sale or conveyance of the whole or the main part of its stock in trade or assets without the consent of its creditors or without satisfying their claims; 
  (h) if it permits any execution issued against it, under which any of its goods, chattels, land or property are seized, levied on or taken in execution, to remain unsatisfied until within four days of the time fixed by the sheriff or other officer for the sale thereof, or for fifteen days after the seizure; 
  (i) if, in the case of a company that is a 
  *federal member institution*, as defined in section 2 of the Canada Deposit Insurance Corporation Act, in respect of which an order has been made under paragraph 39.13(1)(a) of that Act but in respect of which no order has been made under subsection 39.13(1.3) of that Act, a notice has not been published under subsection 39.2(3) of that Act in respect of the institution on or before  
  (i) the 60th day after the day on which the order was made under paragraph 39.13(1)(a) of that Act, or 
  (ii) the day on which any extension of that period ends; 
  (j) if, in the case of a company that is a 
  *federal member institution*, as defined in section 2 of the Canada Deposit Insurance Corporation Act, in respect of which an order has been made under paragraph 39.13(1)(b) of that Act but in respect of which no order has been made under subsection 39.13(1.3) of that Act, a notice has not been published under subsection 39.2(3) of that Act in respect of the institution on or before  
  (i) the 60th day after the day on which the order was made under paragraph 39.13(1)(b) of that Act, or 
  (ii) the day on which any extension of that period ends; 
  (j.1) if, in the case of a company that is a 
  *federal member institution*, as defined in section 2 of the Canada Deposit Insurance Corporation Act, in respect of which an order has been made under paragraph 39.13(1)(d) or subsection 39.13(1.3) of that Act, a notice has not been published under subsection 39.2(3) of that Act in respect of the institution on or before  
  (i) the day that is one year after the day on which the order is made under subsection 39.13(1) of that Act or any shorter period that is specified in the order made under paragraph 39.13(1)(d) or subsection 39.13(1.3) of that Act, as the case may be, or 
  (ii) the day on which any extension of the applicable period ends; or 
  (k) if, in the case of a company that is a federal member institution, as defined in section 2 of the Canada Deposit Insurance Corporation Act, in respect of which the Canada Deposit Insurance Corporation has been appointed as receiver, a transfer of part of the business of the federal member institution to a bridge institution has been substantially completed.  
  
  ### Company deemed unable to pay its debts
  
  4 A company is deemed to be unable to pay its debts as they become due whenever a creditor, to whom the company is indebted in a sum exceeding two hundred dollars then due, has served on the company, in the manner in which process may legally be served on it in the place where service is made, a demand in writing, requiring the company to pay the sum due, and the company has, for sixty days next after the service of the demand, neglected to pay the sum or to secure or compound for the sum to the satisfaction of the creditor. 
  
  ### Commencement of winding-up
  
  5 The winding-up of the business of a company shall be deemed to commence at the time of the service of the notice of presentation of the petition for winding up. 
  
  ## Application 
  
  ### Application
  
  6 (1) This Act applies to all corporations incorporated by or under the authority of an Act of Parliament, of the former Province of Canada or of the Province of Nova Scotia, New Brunswick, British Columbia, Prince Edward Island or Newfoundland and Labrador, and whose incorporation and affairs are subject to the legislative authority of Parliament, and to incorporate banks and savings banks, to authorized foreign banks, and to trust companies, insurance companies, loan companies having borrowing powers, building societies having a capital stock and incorporated trading companies doing business in Canada wherever incorporated where any of those bodies 
  (a) is insolvent; 
  (b) is in liquidation or in the process of being wound up and, on petition by any of its shareholders or creditors, assignees or liquidators — or, if it is a federal credit union, by any of its members, shareholders, creditors, assignees or liquidators — asks to be brought under this Act; or 
  (c) if it is a financial institution, is under the control, or its assets are under the control, of the Superintendent and is the subject of an application for a winding-up order under section 10.1. 
  
  ### Application to authorized foreign banks
  
  (2) In its application to an authorized foreign bank, this Act only applies to the winding-up of its business in Canada and to the liquidation of its assets, and any reference to the winding-up of a company or to the winding-up of the business of a company is deemed, in relation to an authorized foreign bank, to be a reference to the winding-up of the business in Canada of the authorized foreign bank and to include the liquidation of the assets of the authorized foreign bank. 
  
  ### Certain corporations excepted
  
  7 This Act does not apply to building societies that do not have a capital stock or to railway or telegraph companies. 
  
  # PART I 
  
  ## General 
  
  ## Limitation of Part 
  
  ### Subject to Part II
  
  8 In their application to authorized foreign banks, the provisions of this Part are subject to the provisions of Part II. 
  
  ### Subject to Part III
  
  9 In the case of insurance companies, the provisions of this Part are subject to the provisions of Part III. 
  
  ## Winding-up Order 
  
  ### Cases where winding-up order may be made
  
  10 A court may make a winding-up order in respect of a company 
  (a) where the period, if any, fixed for the duration of the company by the Act, charter or instrument of incorporation of the company has expired, or where an event, if any, has occurred, on the occurrence of which it is provided by the Act, charter or instrument of incorporation that the company is to be dissolved; 
  (b) if the company at a special meeting of shareholders — or, if the company is a federal credit union, at a special meeting of members or shareholders — called for the purpose has passed a resolution requiring the company to be wound up; 
  (c) when the company is insolvent; 
  (d) when the capital stock of the company is impaired to the extent of twenty-five per cent thereof, and when it is shown to the satisfaction of the court that the lost capital will not likely be restored within one year; or 
  (e) when the court is of opinion that for any other reason it is just and equitable that the company should be wound up. 
  
  ### Other winding-up circumstances
  
  10.1 If the Superintendent has taken control of a financial institution or of the assets of a financial institution under any of paragraphs 648(1)(b) or (1.11)(b) to (d) of the Bank Act, paragraph 442(1)(b) of the Cooperative Credit Associations Act, any of paragraphs 679(1)(b) or (1.21)(b) to (d) of the Insurance Companies Act or any of paragraphs 510(1)(b) or (1.11)(b) to (d) of the Trust and Loan Companies Act or, in the case of an authorized foreign bank, has taken control of its assets under paragraph 619(1)(b) or (2.1)(b) or (c) of the Bank Act or, in the case of a foreign insurance company, has taken control of its assets under subparagraph 679(1)(b)(i) or (ii) or paragraph 679(1.21)(b) or (c) of the Insurance Companies Act, a court may make a winding-up order in respect of the financial institution, authorized foreign bank or insurance business in Canada of the foreign insurance company if the court is of the opinion that for any reason it is just and equitable that the financial institution, authorized foreign bank or insurance business in Canada of the foreign insurance company should be wound up or if, in the case of  
  (a) a bank to which the Bank Act applies, the control was taken on a ground referred to in paragraph 648(1.1)(a), (c), (e) or (f) of that Act or for reasons related to national security;  
  (a.1) an authorized foreign bank, control of its assets was taken on a ground referred to in paragraph 619(2)(a), (b), (d) or (f) of the Bank Act or for reasons related to national security;  
  (b) a company to which the Trust and Loan Companies Act applies, the control was taken on a ground referred to in paragraph 510(1.1)(a), (c), (e) or (f) of that Act or for reasons related to national security;  
  (c) an insurance company to which the Insurance Companies Act applies, other than a foreign insurance company, the control was taken on a ground referred to in paragraph 679(1.1)(a), (c), (e) or (f) of that Act or for reasons related to national security;  
  (d) a foreign insurance company to which the Insurance Companies Act applies, the control of its assets was taken on a ground referred to in paragraph 679(1.2)(a), (c) or (e) of that Act or for reasons related to national security; or  
  (e) an association to which the Cooperative Credit Associations Act applies, the control was taken on a ground referred to in paragraph 442(1.1)(a), (c), (e) or (f) of that Act.  
  
  ## Application for Order 
  
  ### Application for winding-up order
  
  11 An application for a winding-up order may 
  (a) in the cases mentioned in paragraphs 10(a) and (b), be made by the company or by a shareholder of the company, or, if the company is a federal credit union, by a member or shareholder of the company; 
  (b) in the case mentioned in paragraph 10(c), be made by the company or by a creditor of the company for the sum of at least two hundred dollars or, except in the case of banks and insurance corporations, by a shareholder holding shares in the capital stock of the company to the amount of at least five hundred dollars par value, or holding five shares without nominal or par value in the capital stock of the company; 
  (c) in the cases mentioned in paragraphs 10(d) and (e), be made by a shareholder holding shares in the capital stock of the company to the amount of at least five hundred dollars par value, or holding five shares without nominal or par value in the capital stock of the company; and 
  (d) in the case mentioned in section 10.1, be made by the Attorney General of Canada. 
  
  ### How and where made
  
  12 (1) An application for a winding-up order may be made by petition to the court in the province where the head office of the company is situated or in the province where its chief place or one of its chief places of business in Canada is situated. 
  
  ### Notice of application
  
  (2) Except in cases where an application for a winding-up order is made by a company, four days notice of the application shall, unless otherwise directed by a court, be given to the company before the making of the application. 
  
  ### Power of court
  
  13 A court may, on application for a winding-up order, make the order applied for, dismiss the application with or without costs, adjourn the hearing conditionally or unconditionally or make any interim or other order that it deems just. 
  
  ### Proceedings may be adjourned
  
  14 If a company opposes an application for a winding-up order on the ground that it has not become insolvent, that its suspension or default was only temporary and was not caused by a deficiency in its assets, that its capital stock is not impaired to the extent described in paragraph 10(d), that the impairment does not endanger the capacity of the company to pay its debts in full or that there is a probability that its lost capital will be restored within a year or within a reasonable time thereafter, and shows reasonable cause for believing that its opposition is well founded, the court, in its discretion, may, from time to time, adjourn proceedings on the application, for a time not exceeding six months after the date of the application, and may order an accountant or other person to inquire into the affairs of the company and to report thereon within a period not exceeding thirty days after the date of that order. 
  
  ### Duty of company
  
  15 On the service on the company of an order made under section 14 for an inquiry into the affairs of the company, the president, directors, officers and employees of the company and every other person shall respectively 
  (a) exhibit to the accountant or other person named for the purpose of making the inquiry the books of account of the company and all inventories, papers and vouchers referring to the business of the company or of any person therewith that are in their possession, custody or control; and 
  (b) give all such information as is required by the accountant or other person named for the purpose of making the inquiry in order to form a just estimate of the affairs of the company. 
  
  ### Power of the court
  
  16 On receiving the report of the accountant or person ordered to inquire into the affairs of the company under section 14, and after hearing such shareholders or creditors of the company, or, if the company is a federal credit union, such of its members, shareholders or creditors, as desire to be heard in respect of the report, the court may either refuse the application or make the winding-up order. 
  
  ## Staying Proceedings 
  
  ### Actions against company may be stayed
  
  17 A court may, on the application of a company, or of any creditor, contributory, liquidator or petitioner for the winding-up order, at any time after the presentation of a petition for the order and before making the order, restrain further proceedings in any action, suit or proceeding against the company, on such terms as the court thinks fit. 
  
  ### Court may stay winding-up proceedings
  
  18 A court may, on the application of any creditor, contributory, liquidator or petitioner for the winding-up order, at any time after the order is made, and on proof, to the satisfaction of the court, that all proceedings in relation to the winding-up ought to be stayed, make an order staying those proceedings, either altogether or for a limited time, on such terms and subject to such conditions as the court thinks fit. 
  
  ## Effect of Winding-up Order 
  
  ### Company to cease business
  
  19 A company, from the time of the making of a winding-up order, shall cease to carry on its business, except in so far as is, in the opinion of the liquidator, required for the beneficial winding-up thereof, but the corporate state and all the corporate powers of the company, notwithstanding that it is otherwise provided by the Act, charter or instrument of incorporation of the company, continue until the affairs of the company are wound up. 
  
  ### Transfer of shares void
  
  20 All transfers of shares of a company referred to in section 19 — or, if the company referred to in that section is a federal credit union, all transfers of membership shares or shares — except transfers made to or with the sanction of the liquidator, under the authority of the court, and every alteration in the status of the members of the company, after the commencement of the winding-up, are void. 
  
  ### Effect of winding-up order
  
  21 After a winding-up order is made in respect of a company, no suit, action or other proceeding shall be proceeded with or commenced against the company, except with the leave of the court and subject to such terms as the court imposes. 
  
  ### Execution, etc.
  
  22 Every attachment, sequestration, distress or execution put in force against the estate or effects of a company after the making of a winding-up order is void. 
  
  ### Permitted actions
  
  22.1 (1) Nothing in this Act or an order made under this Act prevents or prohibits the following actions from being taken in accordance with the provisions of an eligible financial contract: 
  (a) the termination of the contract; 
  (b) the netting or setting off or compensation of obligations between a company in respect of which winding-up proceedings under this Act are commenced and another party to the contract; and 
  (c) any dealing with financial collateral including 
  (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and 
  (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral. 
  
  ### Net termination values
  
  (1.01) If the net termination values determined in accordance with the eligible financial contract referred to in subsection (1) are owed by the company to another party to the eligible financial contract, that other party is deemed to be a creditor of the company with a claim provable against the company in respect of the net termination values. 
  
  ### Application to authorized foreign banks
  
  (1.1) In its application to authorized foreign banks, subsection (1) only applies to the eligible financial contracts and obligations between the authorized foreign bank, in respect of its business in Canada, and another party. 
  
  ### Definitions
  
  (2) In subsection (1),  
  *eligible financial contract* means an agreement of a prescribed kind; (contrat financier admissible)   
  *financial collateral* means any of the following that is subject to an interest, or in the Province of Quebec a right, that secures payment or performance of an obligation in respect of an eligible financial contract or that is subject to a title transfer credit support agreement:  
  (a) cash or cash equivalents, including negotiable instruments and demand deposits, 
  (b) securities, a securities account, a securities entitlement or a right to acquire securities, or 
  (c) a futures agreement or a futures account; ( garantie financière)   
  *net termination value* means the net amount obtained after setting off the mutual obligations between the parties to an eligible financial contract in accordance with its provisions; (valeurs nettes dues à la date de résiliation)   
  *title transfer credit support agreement* means an agreement under which title to property has been provided for the purpose of securing the payment or performance of an obligation in respect of an eligible financial contract. (accord de transfert de titres pour obtention de crédit)  
  
  ### Regulations
  
  (3) The Governor in Council may make regulations prescribing kinds of agreements for the purposes of the definition eligible financial contract in subsection (2).  
  22.2  [Repealed, 2012, c. 31, s. 423]  
  
  ## Appointment of Liquidators 
  
  ### Liquidator
  
  23 (1) A court, in making a winding-up order in respect of a company, may appoint a liquidator or more than one liquidator of the estate and effects of the company. 
  
  ### Trustee under Bankruptcy and Insolvency Act 
  
  (2) In the case of a company, except incorporated building societies and railway companies, a court shall not appoint as liquidator any person, other than the Canada Deposit Insurance Corporation, who is not licensed as a trustee under the Bankruptcy and Insolvency Act.  
  
  ### Superintendent not to be liquidator
  
  (3) The Superintendent shall not be appointed as a liquidator of a company. 
  
  ### If more than one liquidator
  
  24 If more than one liquidator is appointed, a court may 
  (a) direct whether any act to be done by a liquidator is to be done by all or any one or more of the liquidators; and 
  (b) allocate responsibilities among the liquidators or permit them to allocate responsibilities among themselves. 
  
  ### Additional liquidators
  
  25 A court may, if it thinks fit, after the appointment of one or more liquidators, appoint an additional liquidator or liquidators. 
  
  ### Notice
  
  26 Except as otherwise ordered by the court, no liquidator shall be appointed under subsection 23(1) unless a previous notice is given to the creditors, contributories and shareholders or members of the company, and the court shall by order direct the manner and form in which the notice shall be given and the length of the notice. 
  
  ### Security
  
  27 The court shall determine what security shall be given by a liquidator on his appointment. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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 
  
  ### 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. 
  
  ### 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. 
  
  ### 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.  
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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). 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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 
  
  ### 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 
  
  ### 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. 
  
  ### 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. 
  
  ### 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 
  
  ### 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. 
  
  ### 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. 
  
  ### 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 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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). 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### Order for payment
  
  61 (1) A court may order any contributory, purchaser or other person from whom money is due to the company to pay the money into a bank or Government savings bank, to the account of the court instead of the liquidator. 
  
  ### Enforcement
  
  (2) An order under subsection (1) may be enforced in the same manner as if it had directed payment to the liquidator. 
  
  ### Rights of contributories
  
  62 The court shall adjust the rights of the contributories among themselves. 
  
  ## Meetings of Creditors 
  
  ### Meetings
  
  63 A court may, if it thinks expedient, direct meetings of the creditors, contributories, shareholders or members of a company to be summoned, held and conducted in such manner as the court directs, for the purpose of ascertaining their wishes, and may appoint a person to act as chairman of any of those meetings, and to report the result of those meetings to the court. 
  
  ### Votes according to amount of claim
  
  64 (1) In the case described in section 63, regard shall, with respect to creditors, be had as to the amount of the debt due to each creditor and with respect to shareholders or members, as to the number of votes conferred on each shareholder or member by law or by the regulations of the company. 
  
  ### Preliminary proof
  
  (2) The court may prescribe the mode of preliminary proof of creditors’ claims for the purpose of any meeting directed to be held under section 63. 
  
  ### Court may summon creditors to consider any proposed compromise
  
  65 Where any compromise or arrangement is proposed between a company in the course of being wound up under this Act and the creditors of the company, or by and between any of those creditors or any class or classes of those creditors and the company or is proposed by the liquidator, the court, in addition to any other of its powers, may, on the application, in a summary way, of any creditor or of the liquidator, order that a meeting of those creditors or class or classes of creditors be summoned in such manner as the court shall direct. 
  
  ### Sanction of compromise
  
  66 If a majority in number, representing three-fourths in value, of the creditors or class or classes of creditors referred to in section 65, present either in person or by proxy at the meeting summoned under that section, agree to any arrangement or compromise, the arrangement or compromise may be sanctioned by an order of the court, and in such case is binding on all the creditors or on the class or classes of creditors, as the case may be, and also on the liquidator and contributories of the company. 
  
  ### Chairman of meeting
  
  67 In directing meetings of creditors, contributories, shareholders or members of a company to be held as provided in this Act, the court may either appoint a person to act as chairman of the meeting or direct that a chairman be appointed by the persons entitled to be present at the meeting, and, in the event the appointed chairman fails to attend the meeting, the persons present at the meeting may elect a qualified person as chairman who shall perform the duties prescribed by this Act. 
  
  ### Voting to be in person or by proxy
  
  68 No creditor, contributory, shareholder or member of a company shall vote at any meeting unless present personally or represented by a person acting under a written authority, filed with the chairman or liquidator, to act as the representative at the meeting, or generally. 
  69 and 70  [Repealed, 1996, c. 6, s. 152]  
  
  ## Creditors’ Claims 
  
  ### What debts may be proved
  
  71 (1) When the business of a company is being wound up under this Act, all debts and all other claims against the company in existence at the commencement of the winding-up, certain or contingent, matured or not, and liquidated or unliquidated, are admissible to proof against the company and, subject to subsection (2), the amount of any claim admissible to proof is the unpaid debt or other liability of the company outstanding or accrued at the commencement of the winding-up. 
  
  ### Uncertain claims valued
  
  (2) In case of any claim subject to any contingency or for unliquidated damages or which for any other reason does not bear a certain value, the court shall determine the value of the claim and the amount for which it shall rank. 
  
  ### Claims of clerks and employees privileged
  
  72 Clerks or other persons in, or having been in the employment of, a company, in or about its business or trade, shall be collocated in the dividend sheet by special privilege over other creditors, for any arrears of salary or wages due and unpaid to them at the time of the making of a winding-up order in respect of the company, not exceeding the arrears that have accrued to them during the three months immediately preceding the date of that order. 
  
  ### Law of set-off to apply
  
  73 (1) The law of set-off, as administered by the courts, whether of law or equity, applies to all claims on the estate of a company, and to all proceedings for the recovery of debts due or accruing due to a company at the commencement of the winding-up of the company, in the same manner and to the same extent as if the business of the company was not being wound up under this Act. 
  
  ### Trust money
  
  (2) For greater certainty, where the business of a trust company is being wound up under this Act, the law of set-off applies in respect of all moneys received or held by the company as deposits, without regard to whether those moneys are considered to be received or held by it in a trustee-beneficiary relationship. 
  
  ### Time for sending in claims
  
  74 A court may, with respect to the winding-up of a company, fix a certain day or certain days on or within which creditors of the company may send in their claims, and may direct notice thereof to be given by the liquidator, and may determine the manner in which notice of the day or days so fixed shall be given by the liquidator to the creditors. 
  
  ### Creditors required to prove claims
  
  75 (1) The liquidator may give notice in writing to creditors who have sent in their claims to him or of whose claims he has notice, and to creditors whose claims he considers should not be allowed without proof, requiring them to attend before the court on a day to be named in the notice and prove their claims to the satisfaction of the court. 
  
  ### Disallowance on default
  
  (2) Where a creditor does not attend in pursuance of the notice given under subsection (1), his claim shall be disallowed, unless the court sees fit to grant further time for the proof thereof. 
  
  ### Disallowance on hearing
  
  (3) Where a creditor attends in pursuance of the notice given under subsection (1), the court may on hearing the matter allow or disallow the claim of that creditor in whole or in part. 
  
  ### Distribution of assets
  
  76 (1) After the notices required by sections 74 and 75 have been given, the respective times specified in the notices have expired and all claims of which proof has been required by due notice in writing by the liquidator in that behalf have been allowed or disallowed by the court in whole or in part, the liquidator may distribute the assets of the company or any part of those assets among the persons entitled to them and without reference to any claim against the company, or, in the case of an authorized foreign bank, against the authorized foreign bank in respect of its business in Canada, that has not then been sent to the liquidator. 
  
  ### Claims not sent in
  
  (2) The liquidator is not liable to any person whose claim has not been sent in at the time of distributing the assets or part thereof under subsection (1) for the assets or part thereof so distributed. 
  
  ### Rank of claims sent in after distribution started
  
  77 Where any claim or claims are sent in to the liquidator after any partial distribution of the assets of a company, the claim or claims, subject to proof and allowance as required by this Act, shall rank with other claims of creditors in any future distribution of assets of the company. 
  
  ## Secured Claims 
  
  ### Duty of creditor holding security
  
  78 If a creditor holds security on the estate of a company, or, in the case of an authorized foreign bank, a creditor or person holds security on the assets of the authorized foreign bank, the creditor or person shall specify the nature and amount of the security in the claim, and shall, in the claim, on oath, put a specified value on the security. 
  
  ### Option of liquidator
  
  79 The liquidator, under the authority of the court, may either consent to the retention by the creditor, or, in the case of an authorized foreign bank, by the creditor or person who holds security, of the property and effects constituting the security referred to in section 78 or on which it attaches, at the value specified on the security, property and effects, or may require from the creditor or person an assignment and delivery of the security, property and effects, at the specified value, to be paid by the liquidator out of the estate as soon as the liquidator has realized the security, together with interest on the value from the date of filing the claim until payment. 
  
  ### Ranking of secured creditor
  
  80 In the event of the retention referred to in section 79, the difference between the value at which the security is retained and the amount of the claim of the creditor shall be the amount for which he may rank in any future distribution of assets. 
  
  ### Security by negotiable instrument
  
  81 (1) If a creditor holds a claim based on negotiable instruments on which the company or, in the case of an authorized foreign bank, the authorized foreign bank in respect of its business in Canada, is only indirectly or secondarily liable and that is not mature or exigible, the creditor is considered to hold security within the meaning of sections 78, 79 and 80, and shall put a value on the liability of the person primarily liable on the security as being the security for the payment of the claim. 
  
  ### Revaluation
  
  (2) After the maturity of the liability referred to in subsection (1) and its non-payment, the creditor is entitled to amend and revalue his claim. 
  
  ### Authorized foreign bank
  
  81.1 Where a person holds security on the assets of an authorized foreign bank, other than those in respect of its business in Canada 
  (a) sections 80 and 81 do not apply in relation to the person’s claim; 
  (b) where there is a difference between the value at which the security is retained and the amount of the person’s claim, no claim for the difference in value is admissible to proof or may be made under this Act against the assets of the authorized foreign bank; and 
  (c) the person is not barred from any recourse either in law or in equity against the authorized foreign bank in proceedings outside Canada for the difference referred to in paragraph (b). 
  
  ### Security by mortgage or charge
  
  82 Where the security consists of a mortgage on ships or shipping or on real property, or of a registered judgment or an execution binding real property that is not by any other provision of this Act invalid for any purpose of creating a lien, claim or privilege on the real or personal property of the company, the property mortgaged or bound by the security shall only be assigned and delivered to the creditor, or, in the case of an authorized foreign bank, to the creditor or person who holds the security 
  (a) subject to all previous mortgages, judgments, executions, hypothecs and liens on the security, holding rank and priority before the creditor’s or person’s claim; 
  (b) on the creditor’s or person’s assuming and binding themself to pay all of those previous mortgages, judgments, executions, hypothecs and liens; and 
  (c) on the creditor’s or person’s securing the estate of the company to the satisfaction of the liquidator against any claim by reason of those previous mortgages, judgments, executions, hypothecs and liens. 
  
  ### In case of subsequent claims
  
  83 Where there are mortgages, judgments, executions, hypothecs or liens on ships or shipping or real property subsequent to those of a creditor or person referred to in section 82, the creditor or person shall only obtain the property 
  (a) by consent of the subsequently secured creditors or persons; 
  (b) on the subsequently secured creditors or persons filing their claims specifying their security on the property as of no value; 
  (c) on the creditor or person paying the subsequently secured creditors or persons the value by them placed on the property; or 
  (d) on the creditor or person securing the estate of the company to the satisfaction of the liquidator against any claim by reason of the subsequent mortgages, judgments, executions, hypothecs and liens. 
  
  ### Authority to retain
  
  84 On a secured claim being filed, with a valuation of the security, the liquidator shall procure the authority of the court to consent to the retention of the security by the creditor or, in the case of an authorized foreign bank, by the creditor or other person who holds the security or shall require from the creditor or person an assignment and delivery of the security. 
  
  ## Dividend Sheet 
  
  ### Preparing dividend sheet
  
  85 In the preparation of a dividend sheet, due regard shall be had to the rank and privilege of every creditor, but no dividend shall be allotted or paid to any creditor holding security on the estate of the company for his claim until the amount for which he may rank as a creditor on the estate, with respect to dividends therefrom, is established as herein provided. 
  
  ## Liens 
  
  ### No lien by execution, etc., after commencement of winding-up
  
  86 (1) No lien or privilege shall be created 
  (a) on the real or personal property of the company for the amount of any judgment debt, or of the interest thereon, by the issue or delivery to the sheriff of any writ of execution or by levying on or seizing under that writ the effects or estate of the company, or 
  (b) on the real or personal property of the company, or on any debts due or accruing or becoming due to the company, by the filing or registering of any memorial or minute of judgment or by the issue or taking out of any attachment or garnishee order or other process or proceeding, if, before the payment over to the plaintiff of the moneys actually levied, paid or received under the writ, memorial, minute, attachment, garnishee order or other process or proceeding, the winding-up of the business of the company has commenced. 
  
  ### Lien for costs excepted
  
  (2) This section does not affect any lien or privilege for costs that the plaintiff possesses under the law of the province in which the writ, attachment, garnishee order or other process or proceeding was issued or taken out. 
  
  ## Contestation of Claims 
  
  ### Claims or dividend may be objected to
  
  87 Any liquidator, creditor, contributory, shareholder or member of a company or, in the case of an authorized foreign bank, the liquidator, the authorized foreign bank or any creditor, may object to any claim filed with the liquidator or to any dividend declared. 
  
  ### Objections in writing
  
  88 (1) Where a claim or dividend is objected to under section 87, the objections shall be filed in writing with the liquidator, together with the evidence of the previous service of a copy thereof on the claimant. 
  
  ### Answers and replies
  
  (2) The claimant shall have six days to answer the objections, or such further time as the court allows, and the contestant shall have three days to reply, or such further time as the court allows. 
  
  ### Day to be fixed for hearing
  
  89 On the completion of the issues on the objections filed under section 88, the liquidator shall transmit to the court all necessary papers relating to the contestation, and the court shall, on the application of either party, fix a day for taking evidence on the contestation and hearing and determining the contestation. 
  
  ### Costs
  
  90 The court may make such order as seems proper in respect of the payment of the costs of the contestation referred to in section 89 by either party or out of the estate of the company. 
  
  ### Default in answer by claimant
  
  91 Where, after a claim or dividend has been duly objected to, the claimant does not answer the objections, the court may, on the application of the contestant, make an order barring the claim or correcting the dividend, or may make such other order with reference thereto as appears right. 
  
  ### Security for costs
  
  92 The court may order the person objecting to a claim or dividend to give security for the costs of the contestation within a limited time, and may, in default, dismiss the contestation or stay proceedings thereon on such terms as the court thinks just. 
  
  ## Distribution of Assets 
  
  ### Distribution of property
  
  93 The property of the company shall be applied in satisfaction of its debts and liabilities, and the charges, costs and expenses incurred in winding-up its affairs. 
  
  ### Winding-up expenses
  
  94 All costs, charges and expenses properly incurred in the winding-up of a company, including the remuneration of the liquidator, are payable out of the assets of the company, in priority to all other claims. 
  
  ### Distribution of surplus
  
  95 (1) The court shall distribute among the persons entitled thereto any surplus that remains after the satisfaction of the debts and liabilities of the company and the winding-up charges, costs and expenses, and unless otherwise provided by law or by the Act, charter or instrument of incorporation of the company, any property or assets remaining after the satisfaction shall be distributed among the members or shareholders according to their rights and interests in the company. 
  
  ### Interest from commencement of winding-up
  
  (2) Any surplus referred to in subsection (1) shall first be applied in payment of interest from the commencement of the winding-up at the rate of five per cent per annum on all claims proved in the winding-up and according to their priority. 
  
  ## Fraudulent Preferences 
  
  ### Gratuitous contracts
  
  96 All gratuitous contracts, or conveyances or contracts without consideration or with a merely nominal consideration, respecting either real or personal property, made by a company in respect of which a winding-up order under this Act is afterwards made, with or to any person whatever, whether a creditor of the company or not, within three months immediately preceding the commencement of the winding-up, or at any time afterwards, shall be presumed to have been made with intent to defraud the creditors of the company. 
  
  ### Contracts injuring or obstructing creditors
  
  97 All contracts by which creditors are injured, obstructed or delayed, made by a company unable to meet its engagements, and in respect of which a winding-up order under this Act is afterwards made, with a person whether a creditor of the company or not, who knows of that inability or has probable cause for believing that inability exists, or after that inability has become public and notorious, shall be presumed to be made with intent to defraud the creditors of the company. 
  
  ### When contracts with consideration voidable
  
  98 A contract or conveyance for consideration, respecting either real or personal property, by which creditors are injured or obstructed, made by a company unable to meet its engagements with a person ignorant of that inability, whether a creditor of the company or not, and before that inability has become public and notorious, but within thirty days next before the commencement of the winding-up of the business of the company under this Act, or at any time afterwards, is voidable, and may be set aside by any court of competent jurisdiction, on such terms with respect to the protection of that person from actual loss or liability by reason of that contract as the court orders. 
  
  ### Contracts made with intent to defraud or delay creditors
  
  99 All contracts or conveyances made and acts done by a company respecting either real or personal property, with intent fraudulently to impede, obstruct or delay the creditors of the company in their remedies against the company, or with intent to defraud the creditors of the company or any of them, and so made, done and intended with the knowledge of the person contracting or acting with the company, whether a creditor of the company or not, and that have the effect of impeding, obstructing or delaying the creditors in their remedies, or of injuring them, or any of them, are void. 
  
  ### Sale or transfer in contemplation of insolvency
  
  100 (1) Where any sale, deposit, pledge or transfer is made of any property, real or personal, by a company in contemplation of insolvency under this Act by way of security for payment to any creditor, or where any property, real or personal, goods, effects or valuable security are given by way of payment by the company to any creditor, whereby that creditor obtains or will obtain an unjust preference over the other creditors, the sale, deposit, pledge, transfer or payment is void, and the subject thereof may be recovered back by the liquidator by suit or action in any court of competent jurisdiction. 
  
  ### Presumption if within thirty days
  
  (2) Where the sale, deposit, pledge or transfer under subsection (1) is made within thirty days next before the commencement of the winding-up of the company under this Act, or at any time afterwards, it shall be presumed to have been so made in contemplation of insolvency, whether or not it was made voluntarily or under pressure and evidence of pressure shall not be admissible to support the transaction. 
  
  ### Exception
  
  (3) The presumption referred to in subsection (2) does not apply to a sale, deposit, pledge or transfer of financial collateral made in accord- ance with the provisions of an eligible financial contract. 
  
  ### Payments by company within thirty days
  
  101 (1) Every payment made within thirty days next before the commencement of the winding-up under this Act by a company unable to meet its engagements in full, to a person who knows of that inability or has probable cause for believing that inability exists, is void, and the amount paid may be recovered back by the liquidator by suit or action in any court of competent jurisdiction. 
  
  ### Restoration of security
  
  (2) Where any valuable security is given in consideration of a payment described in subsection (1), the security or the value thereof shall be restored to the creditor on the return of the payment. 
  
  ### Exception
  
  (3) Subsection (1) does not apply to a payment made in connection with financial collateral in accordance with the provisions of an eligible financial contract. 
  
  ### Definitions
  
  101.1 In subsections 100(3) and 101(3), eligible financial contract and financial collateral have the same meanings as in subsection 22.1(2).  
  
  ### Debts of company transferred to contributories
  
  102 When a debt due or owing by a company has been transferred within the time and under the circumstances mentioned in section 101, or at any time afterwards, to a contributory, or to any person indebted or liable in any way to the company, who knows or has probable cause for believing the company is unable to meet its engagements, or in contemplation of its insolvency under this Act, for the purpose of enabling that contributory or person to set up, by way of compensation or set-off, the debt so transferred, the debt shall not be set up by way of compensation or set-off against the claim on that contributory or person. 
  
  ### Inquiry into dividends and redemptions of shares
  
  102.1 (1) If a company that is being wound up under this Act has, within 12 months preceding the commencement of the winding-up, paid a dividend in respect of any share of the company, other than a stock dividend, — or, in the case of a federal credit union, paid a dividend in respect of a share or membership share, other than a share or membership share dividend — or redeemed or purchased for cancellation any of the shares of the capital stock of the company — or any of the shares or the membership shares of the company, if it is a federal credit union — the court may, on the application of the liquidator, inquire into whether the dividend was paid or the shares or membership shares redeemed or purchased for cancellation at a time when the company was insolvent, or whether the payment of the dividend or the redemption or purchase for cancellation of its shares or membership shares rendered the company insolvent. 
  
  ### Judgment against directors
  
  (2) The court may give judgment to the liquidator against the directors of the company, jointly and severally, in the amount of the dividend or redemption or purchase price, with interest thereon, as has not been paid to the company where the court finds that 
  (a) the transaction occurred at a time when the company was insolvent or the transaction rendered the company insolvent; and 
  (b) the directors did not have reasonable grounds to believe that the transaction was occurring at a time when the company was solvent or the transaction would not render the company insolvent. 
  
  ### Criteria
  
  (3) In making a determination under paragraph (2)(b), the court shall consider whether the directors acted as prudent and diligent persons would have acted in the same circumstances and whether the directors in good faith relied on 
  (a) financial or other statements of the company represented to them by officers of the company or the auditor of the company, as the case may be, or by written reports of the auditor to fairly reflect the financial condition of the company; or 
  (b) a report relating to the company’s affairs prepared pursuant to a contract with the company by a lawyer, notary, an accountant, engineer or appraiser or other person whose profession gave credibility to the statements made in the report. 
  
  ### Judgment against shareholders
  
  (4) If a transaction referred to in subsection (1) has occurred and the court makes a finding referred to in paragraph (2)(a), the court may give judgment to the liquidator against a shareholder, or a member of a federal credit union, who is related to one or more directors or to the company or who is a director not liable by reason of paragraph (2)(b) or subsection (5), in the amount of the dividend or redemption or purchase price referred to in subsection (1) and the interest on it, as was received by the shareholder or member and not repaid to the company. 
  
  ### Directors exonerated by law
  
  (5) A judgment under subsection (2) may not be entered against or be binding on a director who had, in accordance with any applicable law governing the operation of the company, protested against the payment of the dividend or the redemption or purchase for cancellation of the shares of the capital stock of the company or of the shares or membership shares of the federal credit union and had exonerated himself or herself under that law from any liability for it. 
  
  ### Directors’ right to recover
  
  (6) Nothing in this section is to be construed to affect any right, under any applicable law governing the operation of the company, of the directors to recover from a shareholder, or from a member of a federal credit union, the whole or any part of any dividend, or any redemption or purchase price, made or paid to the shareholder or member when the company was insolvent or that rendered the company insolvent. 
  
  ### Onus
  
  (7) For the purposes of an inquiry under this section, the onus of proving 
  (a) that the company was not insolvent lies on the directors and the shareholders of the company or, if the company is a federal credit union, on the directors, members and shareholders of the company; and 
  (b) that there were reasonable grounds to believe any of the following lies on the directors: 
  (i) that the company was not insolvent when a dividend was paid or shares, or membership shares of a federal credit union, were redeemed or purchased for cancellation, or 
  (ii) that the payment of a dividend or a redemption of shares, or membership shares of a federal credit union, did not render the company insolvent. 
  
  ### Meaning of dividend 
  
  (8) In this section, 
  *dividend* includes a patronage allocation within the meaning of section 2 of the Bank Act.  
  
  ## Appeals 
  
  ### Appeals
  
  103 Any person dissatisfied with an order or decision of the court or a single judge in any proceeding under this Act may, 
  (a) if the question to be raised on the appeal involves future rights, 
  (b) if the order or decision is likely to affect other cases of a similar nature in the winding-up proceedings, or 
  (c) if the amount involved in the appeal exceeds five hundred dollars, by leave of a judge of the court, or by leave of the court or a judge of the court to which the appeal lies, appeal therefrom. 
  
  ### Court of Appeal
  
  104 An appeal under section 103 lies to the highest court of final resort in or for the province or territory in which the proceeding originated. 
  
  ### Practice
  
  105 All appeals shall be regulated, as far as possible, according to the practice in other cases of the court appealed to, but no appeal hereinbefore authorized shall be entertained unless the appellant has, within fourteen days from the rendering of the order or decision appealed from, or within such further time as the court or judge appealed from allows, taken proceedings therein to perfect his appeal, or unless, within that time, he has made a deposit or given sufficient security according to the practice of the court appealed to that he will duly prosecute the appeal and pay such damages and costs as may be awarded to the respondent. 
  
  ### Dismissing appeal
  
  106 Where an appellant does not proceed with his appeal according to this Act and the rules of practice applicable, the court appealed to, on the application of the respondent, may dismiss the appeal with or without costs. 
  
  ### Appeal to Supreme Court of Canada
  
  107 An appeal, if the amount involved therein exceeds two thousand dollars, lies by leave of the Supreme Court of Canada to that Court from the highest court of final resort in or for the province or territory in which the proceeding originated. 
  
  ## Procedure 
  
  ### Describing liquidator
  
  108 In all proceedings connected with a company, a liquidator shall be described as the “liquidator of the ( name of company)” or, in the case of an authorized foreign bank, the “liquidator of the business in Canada of the (name of the authorized foreign bank)” and not by individual name only.  
  
  ### Similar to ordinary suit
  
  109 The proceedings under a winding-up order shall be carried on as nearly as may be in the same manner as an ordinary suit, action or proceeding within the jurisdiction of the court. 
  
  ### Powers exercised by a single judge
  
  110 The powers conferred by this Act on a court may, subject to the appeal provided for in this Act, be exercised by a single judge thereof, and the judge may exercise those powers in chambers, either during term or in vacation. 
  
  ### Court may refer matters
  
  111 After a winding-up order is made, the court may, subject to an appeal according to the practice of the court in like cases, as to the court may seem meet, by order of reference, refer and delegate, according to the practice and procedure of the court, to any officer of the court any of the powers conferred on the court by this Act. 
  
  ### Service of process out of jurisdiction
  
  112 A court has the power and jurisdiction to cause or allow the service of process or proceedings under this Act to be made on persons out of the jurisdiction of the court, in the same manner, and with the like effect, as in ordinary actions or suits within the ordinary jurisdiction of the court. 
  
  ### Order of court deemed judgment
  
  113 Every order of a court or judge for the payment of money or costs, charges or expenses made under this Act shall be deemed a judgment of the court, and may be enforced against the person or goods and chattels, lands and tenements of the person ordered to pay in the manner in which judgments or decrees of any superior court obtained in any suit may bind lands or be enforced in the province where the court making the order is situated. 
  
  ### Ordinary practice in case of discovery
  
  114 The practice with respect to the discovery of assets of judgment debtors, in force in the superior courts or in any superior court in the province where any order is made under section 113, is applicable to and may be availed of in like manner for the discovery of the assets of any person who by that order is ordered to pay any money or costs, charges or expenses. 
  
  ### Attachment and garnishment
  
  115 Debts due to any person against whom an order for the payment of money, costs or expenses has been obtained may, in any province where the attachment and garnishment of debts is allowed by law, be attached and garnished in the same manner as debts in that province due to a judgment debtor may be attached and garnished by a judgment creditor. 
  
  ### Witnesses attendance
  
  116 In any action, suit, proceeding or contestation under this Act, the court may order the issue of a writ of subpoena ad testificandum or of subpoena duces tecum, commanding the attendance, as a witness, of any person who is within Canada.  
  
  ### Arrest of absconding contributory, etc.
  
  117 A court may, at any time before or after it has made a winding-up order, on proof being given that there are reasonable grounds to believe that any contributory or any past or present director, manager, officer or employee of the company is about to quit Canada or otherwise abscond, or to remove or conceal any of his goods or chattels, for the purpose of evading payment of calls or for avoiding examination in respect of the affairs of the company, cause that person to be arrested, his books, papers, moneys, securities for money, goods and chattels to be seized, and that person and property to be safely kept until such time as the court orders. 
  
  ### Examination
  
  118 A court may, after it has made a winding-up order, summon before it or before any person named by it any officer of the company or person known or suspected to have in his possession any of the estate or effects of the company or supposed to be indebted to the company, or any person whom the court deems capable of giving information concerning the trade, dealings, estate or effects of the company. 
  
  ### Person summoned refusing to attend
  
  119 If any person summoned under section 118, after being tendered a reasonable sum for his expenses, refuses, without a lawful excuse, to attend at the time appointed, the court may cause that person to be apprehended and brought up for examination. 
  
  ### Production of papers
  
  120 The court may require any officer or person described in section 118 to produce before the court any book, paper, deed, writing or other document in his custody or power relating to the company. 
  
  ### Lien on documents
  
  121 If any person claims any lien on papers, deeds, writings or documents produced by him, that production is without prejudice to the lien, and the court has jurisdiction in the winding-up to determine all questions relating to the lien. 
  
  ### Examination on oath
  
  122 The court or a person named by it may examine, on oath, either by oral or written interrogatories, any person appearing or brought up in the manner described in section 119, concerning the affairs, dealings, estate or effects of the company, and may reduce to writing the answers of the person and require him to subscribe the answers. 
  
  ### Inspection of books and papers
  
  123 (1) After a winding-up order has been made, the court may make such order for the inspection, by the creditors, contributories, shareholders or members of the company, of its books and papers, as the court thinks just. 
  
  ### Limitation of inspection
  
  (2) Any books and papers in the possession of the company may be inspected in conformity with the order of the court, but not further or otherwise. 
  
  ### Officer of company misapplying money
  
  124 When in the course of the winding-up of the business of a company under this Act it appears that any past or present director, manager, liquidator, receiver, employee or officer of the company has misapplied or retained in his own hands, or become liable or accountable for any moneys of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the court may, on the application of any liquidator or of any creditor or contributory of the company, notwithstanding that the offence is one for which the offender is criminally liable, examine into the conduct of the director, manager, liquidator, receiver, employee or officer and, after that examination, may make an order requiring him to repay any moneys so misapplied or retained, or for which he has become liable or accountable, together with interest at such rate as the court thinks just, or to contribute such sums of money to the assets of the company, by way of compensation in respect of the misapplication, retention, misfeasance or breach of trust, as the court thinks fit. 
  
  ### Dispensing with notice
  
  125 The court may, by any order made after a winding-up order and the appointment of a liquidator, dispense with notice required by this Act to creditors, contributories, shareholders or members of the company or to the authorized foreign bank, its creditors or persons who hold security on its assets, where in its discretion the notice may properly be dispensed with. 
  
  ### Courts and judges auxiliary
  
  126 The courts of the various provinces, and the judges of those courts respectively, are auxiliary to one another for the purposes of this Act, and the winding-up of the business of a company or any matter or proceeding relating thereto may be transferred from one court to another with the concurrence, or by the order or orders, of the two courts or by an order of the Supreme Court of Canada. 
  
  ### Order of one court enforceable by another
  
  127 When any order made by one court is required to be enforced by another court, an office copy of the order so made, certified by the clerk or other proper officer of the court that made the order, under the seal of that court, shall be produced to the proper officer of the court required to enforce the order. 
  
  ### Proceeding on order of another court
  
  128 The court required to enforce the order mentioned in section 127 shall, on the production of the certified copy of the order, take the same proceedings thereon for enforcing the order as if it were the order of that court. 
  
  ### Rules with respect to amendments
  
  129 (1) The rules of procedure, for the time being, with respect to amendments of pleadings and proceedings in the court, apply, as far as practicable, to all pleadings and proceedings under this Act. 
  
  ### Authority to apply
  
  (2) Any court before which proceedings under this Act are being carried on has full power and authority to apply to those proceedings the appropriate rules of that court with respect to amendments. 
  
  ### Irregularity or default
  
  130 No pleading or proceeding is void by reason of any irregularity or default that may be amended or disregarded, but the pleading or proceeding may be dealt with according to the rules and practice of the court in cases of irregularity or default. 
  
  ### Powers conferred are supplementary
  
  131 Any powers conferred by this Act on a court are in addition to, and not in restriction of, any other powers at law or in equity of instituting proceedings against any contributory or the estate of any contributory, or against any debtor of the company or the estate of any debtor of the company, for the recovery of any call or other sum due from the contributory, debtor or estate, and those proceedings may be instituted accordingly. 
  
  ### Wishes of creditors
  
  132 A court may, with respect to all matters relating to the winding-up of the business of a company, have regard, so far as it deems just, to the wishes of the creditors, contributories, shareholders or members of the company, as proved to it by any sufficient evidence. 
  
  ### Solicitors and counsel representing classes of creditors
  
  133 (1) A court, if satisfied that, with respect to the whole or any portion of the proceedings before it, the interests of creditors, claimants or shareholders — or, in the case of a federal credit union, members, creditors, claimants or shareholders — can be classified, may, after notice by advertisement or otherwise, nominate and appoint a solicitor and counsel to represent each or any class for the purpose of the proceedings, and all the persons composing any such class are bound by the acts of the solicitor and counsel so appointed. 
  
  ### Service of solicitor
  
  (2) Service on the solicitor appointed to represent a class of notices, orders or other proceedings of which service is required shall for all purposes be, and be deemed to be, good and sufficient service thereof on all the persons composing the class represented by him. 
  
  ### Costs
  
  (3) The court may, by the order appointing a solicitor and counsel for any class, or by subsequent order, provide for the payment of the costs of the solicitor and counsel by the liquidator of the company out of the assets of the company, or out of such portion thereof as to the court seems just and proper. 
  
  ### Liquidator subject to summary jurisdiction of court
  
  134 A liquidator is subject to the summary jurisdiction of the court in the same manner and to the same extent as the ordinary officers of the court are subject to its jurisdiction, and the liquidator may be compelled to perform his duties by order of the court. 
  
  ### Remedies obtained by summary order
  
  135 All remedies sought or demanded for enforcing any claim for a debt, privilege, mortgage, lien or right of property on, in or to any effects or property in the hands, possession or custody of a liquidator may be obtained by an order of the court on summary petition, and not by any action, suit, attachment, seizure or other proceeding of any kind whatever. 
  
  ## Rules, Regulations and Forms 
  
  ### Judges may make
  
  136 (1) A majority of the judges of a court, of which the chief justice shall be one, may, from time to time, 
  (a) settle the forms and make the rules and regulations to be followed and observed in proceedings under this Act; and 
  (b) make rules respecting the costs, fees and charges that shall or may be had, taken or paid in those proceedings by or to attorneys, solicitors or counsel, officers of courts, whether for the officers or for the Crown, and sheriffs, or other persons, or for any service performed or work done under this Act. 
  
  ### Ontario and Quebec
  
  (2) In Ontario the judges of the Superior Court of Justice, and in Quebec the judges of the Superior Court, or a majority of those judges, of which the chief justice shall be one, shall settle the forms and make the rules and regulations referred to in subsection (1). 
  
  ### Until rules are made, procedure of court to apply
  
  137 Until the forms, rules and regulations referred to in section 136 are settled or made, the various forms and procedures, including the tariff of costs, fees and charges in cases under this Act shall, unless otherwise specially provided, be the same as nearly as possible as those of the court in other cases. 
  
  ## Unclaimed Deposits 
  
  ### Unclaimed dividends
  
  138 (1) All dividends deposited in a bank and remaining unclaimed at the time of the final winding-up of the business of a company shall be left for three years in the bank where they are deposited, subject to the claim of the persons entitled thereto. 
  
  ### After three years
  
  (2) If the dividends deposited under subsection (1) are unclaimed at the expiration of three years, the bank shall pay them over, with interest accrued on them, to the Minister of Industry. 
  
  ### If afterwards claimed
  
  (3) If the dividends deposited under subsection (1) are afterwards duly claimed, they shall be paid over by the bank, with interest accrued thereon, to the persons entitled thereto. 
  
  ### Money deposited not paid after three years
  
  139 (1) The money deposited in a bank by a liquidator after the final winding-up of the business of a company shall be left for three years in the bank, subject to be claimed by the persons entitled thereto. 
  
  ### Unclaimed money
  
  (2) Money not paid out pursuant to subsection (1) shall be paid over by the bank, with the interest accrued on it, to the Minister of Industry, and if afterwards claimed shall be paid, with that interest, to the persons entitled to it. 
  
  ## Offences and Punishment 
  
  ### Court may direct criminal proceedings
  
  140 When a winding-up order is made in respect of a company, if it appears in the course of the winding-up that any past or present director, manager, officer or member of the company is guilty of an offence in relation to the company for which he is criminally liable, the court may, on the application of any person interested in the winding-up, or of its own motion, direct the liquidator to institute and conduct a prosecution or prosecutions for the offence and may order the costs and expenses to be paid out of the assets of the company. 
  
  ### Destruction of books or false entry therein
  
  141 Every person who, with intent to defraud or deceive any person, destroys, mutilates, alters or falsifies any book, paper, writing or security, or makes or is privy to the making of any false or fraudulent entry in any register, book of account or other document belonging to a company, the business of which is being wound up under this Act, is guilty of an indictable offence and liable to imprisonment in the penitentiary for any term not less than two years or to imprisonment in any jail or in any place of confinement other than a penitentiary for any term less than two years, with or without hard labour. 
  
  ### Failure to comply with order of court
  
  142 (1) Any liquidator, director, manager, receiver, officer or employee of a company who fails to comply with the requirements or directions of any order made by a court under this Act is guilty of contempt of court and is subject to all processes and punishments of the court for contempt. 
  
  ### Removal of liquidator
  
  (2) Any liquidator who fails to comply as described in subsection (1) may, in the discretion of the court, be removed from office as liquidator. 
  
  ### Refusal by officers of company to give information
  
  143 Any refusal on the part of the president, directors, officers or employees of a company to give all information possessed by them respectively as to the affairs of the company required by the accountant or other person ordered by a court under this Part to inquire into the affairs of the company and to report thereon is a contempt of court, and the president, directors, officers or employees are subject to all processes and punishments of the court for contempt. 
  144  [Repealed, 1996, c. 6, s. 158]  
  
  ### Refusal of witness to answer or subscribe
  
  145 Every person who is brought up for examination before a court after the court has made a winding-up order, or appearing before the court for the examination, and who refuses without lawful excuse to answer any question put to him or to subscribe any answer made by him on the examination is guilty of contempt of court and is subject to all processes and punishments of the court for contempt. 
  
  ## Evidence 
  
  ### Books to be proof of contents
  
  146 Where the business of a company is being wound up under this Act, all books of the company and of the liquidators are, as between the contributories of the company, in the absence of evidence to the contrary, proof of the truth of all matters purporting to be therein recorded. 
  
  ### Affidavits
  
  147 Every affidavit, solemn affirmation or declaration required to be sworn or made under or for the purposes of this Act, or to be used in a court in any proceeding under this Act, may be sworn or made 
  (a) in Canada before a liquidator, judge, notary public, commissioner for taking affidavits or justice of the peace; and 
  (b) outside Canada, before any judge of a court of record, any commissioner for taking affidavits to be used in any court in Canada, any notary public, the chief municipal officer of any town or city, any British consul or vice-consul or any person authorized by or under any statute of Canada, or of any province, to take affidavits. 
  
  ### Judicial notice of seals, stamp or signature
  
  148 All courts, judges, justices, commissioners and persons acting judicially shall take judicial notice of the seal, stamp or signature, as the case may be, of any court, liquidator, judge, notary public, commissioner, justice, chief municipal officer, consul, vice-consul or other person referred to in section 147, attached, appended or subscribed to any affidavit, solemn affirmation or declaration referred to in that section or to any other document to be used for the purposes of this Act. 
  
  ### Copy of order
  
  149 When any order made by one court is required to be enforced by another court, the production of an office copy of the order so made certified by the clerk or other proper officer of the court that made the order, under the seal of the court, is sufficient evidence of the order having been made. 
  
  # PART II 
  
  ## Authorized Foreign Banks 
  
  ### Application of Part
  
  150 This Part applies only to the winding-up of the business in Canada of authorized foreign banks and to the liquidation of their assets. 
  
  ### Notice
  
  151 (1) In their application to an authorized foreign bank, section 26 and subsections 35(1) and 42(1) are to be read as if notice is required to be given to the authorized foreign bank, its creditors and persons who hold security on any of its assets. 
  
  ### Exception
  
  (2) Notice need not be given to persons referred to in subsection (1) who hold security on any of the assets of an authorized foreign bank unless they can be located using information contained in the books and records in Canada of the authorized foreign bank and those books and records are accessible by or under the control of, where section 26 applies, the petitioner for the winding-up order and, where subsection 35(1) or 42(1) applies, the liquidator. 
  
  ### Duties after appointment
  
  152 A liquidator, on appointment in respect of an authorized foreign bank, shall take into custody or under control all the assets of the authorized foreign bank, and shall perform the duties that are imposed by the court or by this Act with reference to 
  (a) the winding-up of the business in Canada of the authorized foreign bank; and 
  (b) the liquidation of the assets of the authorized foreign bank. 
  
  ### Authorized foreign bank to cease business
  
  153 From the time of the making of a winding-up order in respect of an authorized foreign bank, it shall cease to carry on its business in Canada or deal in any way with its assets, except in so far as is, in the opinion of the liquidator, required for the beneficial winding-up of its business in Canada and liquidation of its assets. 
  
  ### Effect of winding-up order
  
  154 After a winding-up order is made in respect of an authorized foreign bank, no suit, action or other proceeding may be proceeded with or commenced against the authorized foreign bank in respect of its business in Canada or of its assets, except with the leave of the court and subject to the terms, if any, that the court imposes. 
  
  ### Execution, etc.
  
  155 Every attachment, sequestration, distress or execution put in force against the assets of the authorized foreign bank after the making of a winding-up order in respect of it is void. 
  
  ### Liquidator to prepare statement
  
  156 A liquidator shall, within 120 days after appointment in respect of an authorized foreign bank, prepare a statement of 
  (a) the assets, debts and liabilities of the authorized foreign bank in respect of its business in Canada and of the value of those assets as shown by the books and records of the authorized foreign bank; and 
  (b) the assets of the authorized foreign bank, other than those in respect of its business in Canada, and the value of the assets as shown by the books and records of the authorized foreign bank or, where the books and records are not available, an estimated value of the assets. 
  
  ### What debts may be proved
  
  157 (1) When the business in Canada of an authorized foreign bank is being wound up and its assets are being liquidated under this Act, only debts and claims against the authorized foreign bank in respect of its business in Canada in existence at the commencement of the winding-up, certain or contingent, matured or not, and liquidated or unliquidated, are admissible to proof and, subject to subsection (2), the amount of any claim admissible to proof is the unpaid debt or other liability of the authorized foreign bank in respect of its business in Canada outstanding or accrued at the commencement of the winding-up. 
  
  ### Uncertain claims valued
  
  (2) In case of any claim subject to any contingency or for unliquidated damages or which for any other reason does not bear a certain value, the court shall determine the value of the claim and the amount for which it shall rank. 
  
  ### Law of set-off to apply
  
  158 The law of set-off, as administered by the courts, whether of law or equity, applies, in the same manner and to the same extent as if the business in Canada of the authorized foreign bank was not being wound up under this Act, only to 
  (a) claims by creditors of the authorized foreign bank in respect of its business in Canada; and 
  (b) proceedings for the recovery of debts due or accruing due to an authorized foreign bank in respect of its business in Canada at the commencement of the winding-up. 
  
  ### Distribution of property
  
  158.1 (1) Where a winding-up order is made in respect of an authorized foreign bank, claims shall be paid in the following order of priority: 
  (a) charges, costs and expenses, including the remuneration of the liquidator, incurred in the winding-up of the business in Canada of the authorized foreign bank and of the liquidation of its assets; 
  (b) claims of preferred creditors, specified in section 72; and 
  (c) debts and liabilities of the authorized foreign bank in respect of its business in Canada in order of priority as set out in sections 625 and 627 of the Bank Act.  
  
  ### Distribution and release of surplus assets
  
  (2) Any assets that remain after payment of the claims referred to in paragraphs (1)(a) to (c) are to be applied firstly in payment of interest from the commencement of the winding-up at the rate of five per cent per annum on all claims proved in the winding-up and according to their priority. The liquidator may, with the approval of the court, release to the authorized foreign bank any assets remaining after payment of the interest. 
  
  ### Transfer to foreign liquidator
  
  158.2 Where an authorized foreign bank is in liquidation in the jurisdiction in which its head office is situated or where it principally carries on business, the Superintendent may, if the Superintendent deems it advisable and in the interests of the creditors of the authorized foreign bank, authorize the liquidator, subject to the approval of the court, to transfer the assets of the authorized foreign bank to the liquidator in that jurisdiction. 
  
  ### Right of action not debarred
  
  158.3 Subject to this Act, where the assets of an authorized foreign bank are not sufficient to cover in full all claims referred to in paragraphs 158.1(1)(a) to (c), the creditors are not barred from any recourse they have, either in law or equity, except in respect of the share, if any, received in the distribution of the assets. 
  
  # PART III 
  
  ## Restructuring of Insurance Companies 
  
  ### Definitions
  
  159 In this Part,  
  *company* means an insurance company; (société)   
  *foreign company* means a foreign insurance company; (Version anglaise seulement)   
  *policy* includes, without limiting the generality of its meaning, policy as defined in subsection 2(1) of the Insurance Companies Act. (police)  
  
  ### Application of Part
  
  159.1 (1) This Part applies only to insurance companies. 
  
  ### Transitional
  
  (2) This Part applies only in respect of applications for winding-up orders that are made after the date of coming into force of this subsection, and applications for winding-up orders that were made on or before that date shall be dealt with in accordance with the provisions of this Part as they read immediately before that date. 
  
  ### Protection of asset orders
  
  160 The court may, at any time after an application for a winding-up order is made, on the application of the applicant for the winding-up order or of the liquidator, make such order as the court considers appropriate for the protection of the assets of the estate of the company. 
  
  ### Order of priority for payment of claims
  
  161 (1) Subject to this Act, claims shall be paid in the following order of priority: 
  (a) costs of liquidation; 
  (b) claims of preferred creditors, specified in section 72; 
  (c) claims of policyholders of the company ranking as follows: 
  (i) in the case of policies of life insurance and policies of accident and sickness insurance, 
  (A) if transfer or reinsurance is not effected as provided in section 162, claims that have arisen under those policies of the company, in accordance with the terms thereof, prior to the date of the filing of the statement of the liquidator in the Office of the Superintendent as provided in subsection 168(1), less any amount previously advanced by the company on the security of those policies, and claims to the value of those policies computed as provided in section 163, or 
  (B) if transfer or reinsurance is effected as provided in section 162, of all or any of the policies of the company, 
  (I) in respect of those policies of the company for which transfer or reinsurance is effected, the consideration payable for the transfer or reinsurance of the policies of the company, and 
  (II) in respect of those policies of the company for which transfer or reinsurance is not effected, claims that have arisen under those policies, in accordance with the terms thereof, prior to the date of the filing of the statement of the liquidator in the Office of the Superintendent as provided in subsection 168(1), less any amount previously advanced by the company on the security of those policies and claims to the value of those policies computed as provided in section 163, and 
  (ii) in the case of policies of insurance other than policies of life insurance and policies of accident and sickness insurance, 
  (A) firstly, claims that have arisen under those policies of the company by reason of the occurrence of the event insured against, in accordance with the terms thereof, prior to the date of the filing of the statement of the liquidator in the Office of the Superintendent as provided in subsection 168(1), less any amount previously advanced by the company on the security of those policies, and 
  (B) secondly, the claims of such policyholders to the value of those policies computed as provided in section 163 or, where transfer or reinsurance is effected as provided in section 162 of all or any of the policies of the company, the consideration payable for the transfer or reinsurance of the policies of the company or, as the case may be, claims that have arisen under those policies of the company by reason of the cancellation of such policies, in accordance with the terms thereof, prior to the date of the filing of the statement of the liquidator in the Office of the Superintendent as provided in subsection 168(1), less any amount previously advanced by the company on the security of the policies so cancelled; and 
  (d) expenses described in paragraph 686(1)(a) of the Insurance Companies Act that were incurred by the Superintendent in respect of the company and assessed against and paid by other companies pursuant to that Act, and interest in respect thereof at such rate as is specified by the Superintendent.  
  
  ### Claims re life companies — policyholders
  
  (2) No payment on a claim by a policyholder of a company insuring risks under policies referred to in subparagraph (1)(c)(i) claiming a minimum amount that the company has agreed to pay under a policy in respect of an amount for which a segregated fund is maintained under section 451, subsection 542.03(2) or section 593 of the Insurance Companies Act for a deficiency if the assets of the fund are insufficient to satisfy such a claim, shall be made unless the assets of the company are sufficient to pay the claims referred to in subsection (1) and all of the terms of the policies of policyholders referred to in that subsection have been satisfied in full including any interest component of those policies accruing to the date of payment of the claim.  
  
  ### Claims re life companies — creditors
  
  (2.1) No payment on a claim by a creditor of a company insuring risks under policies referred to in subparagraph (1)(c)(i) shall be made unless the assets of the company are sufficient to pay the claims referred to in subsections (1) and (2) and all of the terms of the policies of the policyholders referred to in those subsections have been satisfied in full including any interest component of those policies accruing to the date of payment of the claim. 
  
  ### Interest component
  
  (3) For the purposes of subsections (2) and (2.1), the interest component of the claims of policyholders referred to in subparagraph (1)(c)(i) shall be treated as part of the claim that has arisen under the policy in accordance with the terms of the policy. 
  
  ### Claims re other companies
  
  (4) No payment on a claim by a creditor of a company insuring risks under policies referred to in subparagraph (1)(c)(ii) shall be made unless the assets of the company are sufficient to pay the claims referred to in subsection (1). 
  
  ### Subordinated debt holders
  
  (5) Holders of subordinated indebtedness, within the meaning of subsection 2(1) of the Insurance Companies Act, of a company and other indebtedness that by their terms rank equally or are subordinate to such indebtedness are entitled to receive payment on their claims only if the assets of the company are sufficient to pay the claims referred to in subsections (2), (2.1) and (4).  
  
  ### Priority of claims of policyholders in foreign companies
  
  (6) Despite anything in this Part but subject to subsection (8), if a company is a foreign company, no claim, after the payment of costs of liquidation, ranks against the assets other than claims described in paragraphs (a) to (c), and the balance, if any, of the assets remaining after those claims are paid shall be applied by the liquidator in satisfaction of the claims of any other creditors — but not including policyholders and creditors of the foreign company in respect of a class of insurance not specified in the order referred to in paragraph (b) — of the insurance business in Canada of the foreign company in accordance with subsections (2), (2.1) and (4): 
  (a) the preferred creditors referred to in paragraph (1)(b); 
  (b) holders of policies of a class of insurance specified in the order of the Superintendent under Part XIII of the Insurance Companies Act other than holders of a policy exempt from Part XIII by virtue of section 572.1 of that Act; and  
  (c) expenses described in paragraph 686(1)(a) of the Insurance Companies Act, that were incurred by the Superintendent in respect of the company and assessed against and paid by other companies pursuant to that Act, and interest in respect of those expenses at the rate that is specified by the Superintendent.  
  
  ### Definitions
  
  (7) In subsection (8),  
  *assets in Canada* means assets in Canada, within the meaning of subsection 2(1) of the Insurance Companies Act, of a foreign company; (actif au Canada)   
  *assets under the control of the chief agent* means the other assets of the foreign company that are held in Canada under the control of its chief agent, within the meaning of section 571 of the Insurance Companies Act, including all amounts received or receivable in respect of its insurance business in Canada. (actif sous le contrôle de l’agent principal)  
  
  ### Other foreign company priority provisions
  
  (8) Where a foreign company is authorized to insure in Canada 
  (a) risks falling within the class of life insurance; and 
  (b) risks falling within some other class of insurance, other than accident and sickness insurance, credit protection insurance and other approved products insurance, 
  (i) in the case of the costs of liquidation and the claims of preferred creditors, the costs, portions of expenses and claims shall be paid from the assets in Canada, maintained for the policies referred to in subparagraphs (ii) and (iii), together with the assets under the control of the chief agent, in the proportion that the court considers fair and equitable, 
  (ii) in the case of policies falling within the classes of life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance, claims shall be paid 
  (A) firstly, from the assets in Canada maintained for those policies, 
  (B) secondly, from the assets under the control of the chief agent in such proportion as the court considers fair and equitable, and 
  (C) thirdly, from the balance, if any, of any assets referred to in clauses (iii)(A) and (B) remaining after the claims under subparagraphs (i) and (iii) are paid, 
  (iii) in the case of policies falling within some other class of insurance, claims shall be paid 
  (A) firstly, from the assets in Canada maintained for those policies, 
  (B) secondly, from the assets under the control of the chief agent in such proportion as the court considers fair and equitable, and 
  (C) thirdly, from the balance, if any, of any assets referred to in clauses (ii)(A) and (B) remaining after the claims under subparagraphs (i) and (ii) are paid, and 
  (iv) in the case of expenses described in paragraph 686(1)(a) of the Insurance Companies Act that were incurred by the Superintendent in respect of the foreign company and assessed against and paid by other companies pursuant to that Act, the expenses shall be paid from the balance, if any, of the assets referred to in clauses (ii)(A) and (B) and (iii)(A) and (B) remaining after the claims under subparagraphs (i), (ii) and (iii) are paid.  
  
  ### Priority of costs, etc.
  
  (9) For greater certainty, the costs, claims and expenses referred to in subsections (6) and (8) shall be paid in accordance with the priorities set out in subsection (1). 
  
  ### Release of balance of assets to company
  
  (10) The liquidator may, with the approval of the court, release to the foreign company any balance of the assets remaining after payment of claims in the order of priority prescribed by subsection (9). 
  
  ### Payment of liabilities
  
  (11) Notwithstanding anything in this section, the liquidator may, in carrying on the business of the company pursuant to paragraph 35(1)(b), with the approval of the court, pay liabilities relating to the portion of the business being carried on, where the payment is considered desirable for the retention of goodwill and enhancement of value to the estate of the company. 
  
  ### Transfer and reinsurance of policies by liquidator
  
  162 (1) The liquidator may, with the approval of the court and without the consent of the policyholders, arrange for the transfer or reinsurance of 
  (a) all or a portion of the policies of the company, in the case of a company other than a foreign company, or 
  (b) all or a portion of the policies in respect of a foreign company’s insurance business in Canada in a company, society, foreign company or provincial company within the meaning of subsection 2(1) of the Insurance Companies Act or an insurance company incorporated by or under an Act of a legislature of a province and authorized under the laws of the province to issue policies of the class being transferred or reinsured, if the terms of the transfer or reinsurance are, in the opinion of the court having regard to the priorities set out in this Part, fair and equitable to  
  (c) the policyholders whose policies are being transferred or reinsured, 
  (d) the estate of the company as a whole, and 
  (e) the remaining policyholders of the company. 
  
  ### Transfer and reinsurance of policies by liquidator
  
  (2) The liquidator may, with the approval of the court and without the consent of the policyholders, arrange for the transfer or reinsurance of all or a portion of the policies of the company, other than policies in respect of its insurance business in Canada, in any body corporate if the terms of the transfer or reinsurance are, in the opinion of the court, having regard to the priorities set out in this Part, fair and equitable to 
  (a) the policyholders whose policies are being transferred or reinsured; 
  (b) the estate of the company as a whole; and 
  (c) the remaining policyholders of the company. 
  
  ### Transfer or reinsurance is in lieu of claim on policy
  
  (3) The transfer or reinsurance of policies referred to in subsections (1) and (2) shall be in lieu of the claim for the value of those policies computed as provided in section 163. 
  
  ### Mortgage insurance policies
  
  (4) The liquidator of a company, society or foreign company within the meaning of subsection 2(1) of the Insurance Companies Act may, with the approval of the court and the consent of the Canada Mortgage and Housing Corporation, and without the consent of the policyholders, arrange for the transfer to that corporation of all or a portion of the company’s, society’s or foreign company’s policies of mortgage insurance, or arrange for the reinsurance of all or a portion of those policies by that corporation.  
  
  ### Partial payment or reinsurance
  
  162.1 Where the liquidator estimates that the assets of the company are insufficient to provide for the payment in full of the preferred claims specified in section 72, for the payment in full of claims referred to in subparagraphs 161(1)(c)(i) or (ii) and for the transfer or reinsurance in full of policies of the company, the claims referred to in subparagraphs 161(1)(c)(i) or (ii) may be paid at, and the transfer or reinsurance may be effected at, such percentage of the full amount of the policies as may be approved by the court. 
  
  ### Modification of policies
  
  162.2 The court may, on the application of the liquidator, without the consent of the policyholders concerned but on such notice to them as the court considers appropriate, modify the terms of all or any of the policies of insurance of the company held by those policyholders if the court is satisfied that the modification will have no adverse material impact on the policyholders under the terms of the policies. 
  
  ### Computation of claims
  
  163 (1) Claims of policyholders of the company to the value of their policies referred to in subparagraphs 161(1)(c)(i) or (ii) shall be computed by the liquidator in accordance with such methods of computation as the Superintendent may deem fair and reasonable, less any amount previously advanced by the company on the security of the policies. 
  
  ### Amendment thereof
  
  (2) The methods of computation established by the Superintendent are binding on all concerned, subject only to modification by the Superintendent. 
  
  ### Transfer of assets to the liquidator
  
  164 (1) The assets of the company in Canada that may be on deposit with any government in Canada or with trustees or otherwise held for the company or for the protection of the policyholders of the company of the class or classes that are affected by the winding-up order shall, on order of the court having jurisdiction, be transferred to the liquidator. 
  
  ### Assets on deposit outside Canada
  
  (2) If the company is a Canadian company that has deposited with the government of any state or country outside Canada, or with any trustee or other person in that state or country, any of its assets for the protection of the company’s policyholders in that state or country, the liquidator may request that government, trustee or other person to transfer those assets to the liquidator and on the transfer being made, those assets shall be used for the benefit of all the company’s policyholders in the same manner as any other assets of the company. 
  
  ### Consequence of non-transfer of assets
  
  (3) If a government, trustee or other person referred to in subsection (2) does not transfer the assets deposited with it within the period commencing with the date of the liquidator’s request for the transfer of those assets that the Court may fix, the policyholders of the company, for whose protection the deposit was made, are deemed to have refused the reinsurance, if any, arranged by the liquidator, and, whether transfer or reinsurance has been arranged or not, to have forfeited all right and claim to any share of the assets of the company other than the assets so deposited for their protection outside Canada. 
  
  ### Transfer to foreign liquidator
  
  165 If a foreign company is in liquidation in the country in which its head office is situated, the Superintendent may, if the Superintendent considers it advisable and in the interests of policyholders in respect of the foreign company’s insurance business in Canada, authorize the liquidator, subject to the approval of the court, to transfer the assets of the foreign company to the liquidator in that country. 
  
  ### Liquidator to prepare statement of claimants and creditors
  
  166 (1) The liquidator shall, without the filing of any claim, notice or evidence or the taking of any action by any person, prepare a statement of all the persons appearing by the books and records of the company to be creditors of the company or to be claimants under any policy including any matured, valued or cancelled policy, taking cognizance in that connection of all claims that have arisen in accordance with the terms of the policies of which the liquidator has notice. 
  
  ### Collocation
  
  (2) The statement referred to in subsection (1) shall show the amount, determined as provided in section 161 in respect of policyholders, for which each person is to rank as a claimant or a creditor and every such person shall be collocated and ranked as, and is entitled to the right of, a claimant or a creditor for the amount so ascertained by the liquidator, without filing any claim, notice or evidence, or taking any action. 
  
  ### Objections
  
  (3) Any collocation made pursuant to subsection (2) may be contested by any person interested, and any person who is not collocated, or who is dissatisfied with the amount for which the person is collocated, may file a claim. 
  
  ### Amendment of statement
  
  (4) The liquidator or the court may rectify any statement prepared under subsection (1) on account of omissions or errors therein notified to the liquidator or discovered by the liquidator at any time before the completion of the liquidation, and only the claims appearing in the statement or amended statement shall be regarded in the distribution of the assets. 
  
  ### Right of action not debarred
  
  167 Where the assets are not sufficient to cover in full all claims appearing in the statement or amended statement described in section 166, the policyholders are not barred from any recourse they have, either in law or equity, against the company issuing the policy or against any shareholder or director thereof, except in respect of the share, if any, received in the distribution of those assets. 
  
  ### Copy of statement filed in Office of the Superintendent
  
  168 (1) A copy of the statement referred to in subsection 166(1), certified by the liquidator, shall be filed in the Office of the Superintendent, after not less than 30 days’ notice of the liquidator’s intention to do so has been given by the liquidator by notice in the Canada Gazette and in the official gazette of each province, and in two newspapers published at or nearest the place where the head office of the company or the chief agency of the company, as the case may be, is situated.  
  
  ### When policyholder to rank as creditor
  
  (2) Any claim that has arisen under the terms of a policy of which notice is received by the liquidator after the date of the filing of a statement referred to in subsection 166(1) or an amended statement referred to in subsection 166(4) shall rank on the assets only for the value entered in the statement, unless the assets are sufficient to pay all claimants in full, and in that case the policyholder shall rank as a creditor for the balance of the policyholder’s claim. 
  
  ### Notice of filing
  
  169 The liquidator shall send by prepaid mail a notice of the filing of the statement under subsection 168(1) to each claimant or creditor named in the statement, addressed to the latest address on record with the company, stating therein the amount for which the creditor or claimant is entitled to rank against the assets of the company. 
  
  ### Report to Superintendent
  
  170 Where the company is a company, society, foreign company or provincial company within the meaning of subsection 2(1) of the Insurance Companies Act, the liquidator shall report to the Superintendent once in every six months, or more often, as the Superintendent may require, on the condition of the affairs of the company, with such particulars as the Superintendent may require.  
  
  ### Publication of notice of proceedings
  
  171 Publication in the Canada Gazette, in the official gazette of each province and in two newspapers published at or nearest the place where the head office of the company or chief agency of the company, as the case may be, is situated, of notice of any proceedings of which, under this Act, creditors should be notified, is sufficient notice to holders of policies in respect of which no notice of claim has been received.  
  
  ### Priority of certain claims
  
  172 Nothing in this Part prejudices or affects the priority of any mortgage, lien or charge on the property of the company. 
  
  