In the case of a bankruptcy, dividends allocated to creditors in the estate asset distribution exercise remain at times unclaimed.
Under what circumstances are dividends not distributed?
This situation can occur for various reasons. The trustee may have sent the dividend payment to the creditor’s last known address who may have moved without notice of an address change. It may also occur that funds are available for distribution but that creditors may have decided not to prove their claim. However, when he closes his file, the Trustee must dispose of any unclaimed dividends. He remits them to the Office of the Superintendent of Bankruptcy Canada (OSB) which will hold them for a possible claim by those creditors for whom they are intended.
How to obtain one’s share of the estate fund?
Before explaining how a creditor or his representative can retrieve an unclaimed dividend that should have been allocated to him, let’s first determine how to receive one’s share of the estate funds by following the normal procedural sequence.
Creditors must always:
- complete the proof of claim form provided with the notice of bankruptcy as soon as they receive it and return it to the Trustee.
- make sure that address change(s), if any, are forwarded to the Trustee.
If the proof of claim has not been submitted to the estate Trustee, recovering unclaimed dividends will not be possible.
What to do if you have not received your dividend?
Under certain circumstances, a creditor may not have received a dividend that is allocated to him. Fortunately, this dividend is not lost and can always be recovered.
As noted above, the Trustee must eventually complete his administrative duties and close the file. Therefore, he may not keep unclaimed dividends indefinitely. Accordingly, the law stipulates that the funds are to be handed over to the OSB which will keep them until a request is made by the creditor for whom the funds were directed.
If a creditor believes he may have right to a dividend that he has never received, he must do a search in the OSB database of information dating back to April 1, 1994. If the amount is from older assets, he should then communicate directly with the OSB to retrieve them. To date, a research fee of $30 per application is required and is non-refundable regardless of the application outcome.
When the creditor has found a dividend which was actually intended for him, he must complete and submit a refund application form provided by the OSB. This form must be accompanied by an affidavit confirming that he is the recipient of the dividend, and must mention the contact details provided on the proof of claim once transmitted to the estate Trustee. The application and the affidavit accompanying it shall be forwarded to the OSB with the prescribed claim fee.
The application form may vary depending whether an individual or a business is involved, but in all cases, the party will need to demonstrate that he/it has the right to claim the dividend. The “Unclaimed Dividends Search” tab on the OSB website contains all the necessary information. Affidavits and the prescribed forms are also available.
Ginsberg Gingras Trustees at your service
If you need additional information concerning unclaimed dividends, feel free to contact us. Whether for yourself or one of your customers, our Trustees will gladly assist you and even offer you some advice, if necessary.