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A creditors’ meeting is convened by the Licensed Insolvency Trustee (LIT) within 21 days following an assignment in bankruptcy (except in the case of summary administration).

Once appointed, the LIT must take all necessary steps to administer the file until the first creditors’ meeting is held.

Here are the statutory obligations of an LIT up to the creditors’ meeting.

Although this process has many steps, they are to a certain extent discretionary on the part of the LIT, depending on the type of file they are administering.

Steps leading up to the creditor’s meeting

  1. The LIT must comply immediately if a security is required by the superintendent of bankruptcy when a certificate of appointment is issued.
  2. The debtor’s mail may be redirected by the LIT.
    This step generally occurs when the debtor has, for example, accounts receivable, which facilitates realization of assets for the benefit of the creditors.
  3. The LIT must immediately take possession of all the debtor’s accounting records.
  4. A complete inventory of the debtor’s property must be made. The LIT must also ensure that those assets are in a secure location. The LIT will generally change the locks for the premises and insure property.
  5. In the event that perishable goods are on the premises, the LIT must dispose of them quickly.
  6. A separate bank account to administer the file must be opened. Proper accounting must be conducted to fully identify revenues and expenses.
  7. In the five days following the issuance of a certificate of appointment, the LIT must send a bankruptcy notice to all known creditors and file same with the Superintendent of Bankruptcy. This notice must indicate the date, time, and location of the creditors’ meeting. The debtor’s statement of affairs, a proof of claim, and a proxy form are included with the notice.
  8. A notice in the local newspaper of the debtor’s locality must be published no later than five days before the creditors’ meeting.
  9. Claims submitted by creditors are received and reviewed.
  10. The LIT must then prepare a preliminary report, which will be provided to the creditors at the creditors’ meeting.
    All decisions made and steps taken by the LIT are included in this report. It also includes the LIT’s analysis of transactions that may require closer attention (transfers at under value).
    Finally, the LIT offers his or her professional opinion about estimated realization to creditors following the sale of assets, net of secured claims, and the Crown (payroll deductions).

The LIT’s work in these first 21 days is essential. During the meeting, the creditors have the opportunity to ask questions to the LIT on any work carried out. Decisions about selling assets will be made to maximize the realization to creditors.

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Need more information?

We hope that this brief overview has helped you to learn about the important work the Licensed Insolvency Trustee does within the 21 days preceding the creditors’ meeting.

For more information, have a look at this article by Sylvie Lyons about the first creditors’ meeting.

You can, of course, contact us at any time. We would be pleased to answer all your questions.

Tania Daher

Associate Vice President, CIRP, Licensed Insolvency Trustee

Official Office: Laval
Phone: 450-781-4800

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