Directions for Conservatory Measures

Canada

In the matter of: Domenic A. Giustini

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Directions for Conservatory Measures
(Section 14.03 of the Bankruptcy and Insolvency Act)

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Whereas the Bankruptcy and Insolvency Act (the Act) provides the Superintendent of Bankruptcy (the Superintendent) with the general power to supervise the administration of all estates and matters to which the Act applies;

Whereas Domenic A. Giustini (the Trustee) is the holder of an individual license as trustee in bankruptcy;

Whereas a practice review conducted between January 6 to 15, 2010, identified numerous deficiencies in the reconciliation of the consolidated accounts of the Trustee, specifically that:

• the June 2009 bankruptcy account identified GST returns had been returned to 22 individual debtors. The bank statement showed these cheques as clearing but the cancelled cheques were missing;
• the August 2009 bankruptcy account indicated that stale-dated cheques representing unclaimed dividends and unclaimed GST refunds were cleared from the account that month but the cancelled cheques were missing;
• an individual account was debited $114.11 for bank deposit books, but this estate had only one deposit; and
• a Division 1 Proposal which was refused indicated a $1000.00 deposit had been received, but the estate account was not opened until well after the refusal of the proposal and did not have a deposit of $1000.00.

Whereas the Finance section of the Office of the Superintendent of Bankruptcy (OSB) reported that they had not received any such unclaimed dividends and undistributed assets from the Trustee.

Whereas at a meeting on January 29, 2010 officials of the OSB presented the findings of the practice review to the Trustee. OSB officials reviewed the practice report with the Trustee and required the Trustee to produce the missing cheques by the end of the business day on Monday, February 1, 2010 and respond to the allegations in the practice report by February 28, 2010.

Whereas the Trustee met with Glen Schmid, Senior Bankruptcy Analyst, Trustee Compliance, and Bill Webster, Senior Bankruptcy Analyst, Trustee Compliance, on February 1, 2010. At this meeting the Trustee informed the OSB officials that he had diverted the funds to his own account by having the cheques made payable to himself. The Trustee provided photocopies of the cheques, dated from October 26, 2008 through October 20, 2009. The Trustee also provided copies of 114 cheques made out to the individuals for their GST refunds. The Trustee also provided a copy of the submission of the unclaimed dividends and undistributed funds that he had made.

Whereas OSB officials have identified the diversion of $37,010.77 from trust accounts;

Whereas I believe on reasonable grounds that the estates require protection;

Whereas the Superintendent may, for the protection of an estate, exercise the powers set out in subsection 14.03(1) of the Act, in the circumstances referred to in section 14.03(2) of the Act;

Whereas the Superintendent has delegated to me, in accordance with section 14.01(2) of the Act, the powers of the Superintendent as specified at section 14.03(1) of the Act, in the circumstance referred to in section 14.03(2), a copy of which delegation is attached, along with copies of sections 14.01, 14.02 and 14.03 of the Act;

Whereas paragraphs 14.03(1)(c) and 14.03(2)(b) of the Act apply;

I, Fred Sheeler, in my capacity as delegate for the Superintendent,

Direct The Bank of Nova Scotia, St. Georges Square Branch, 83 Wyndham Street North, Guelph, Ontario, N1H 4E9;

1. To consider, upon receipt of the present directions Bill Webster or Glenn Schmid, employees of the Office of the Superintendent of Bankruptcy, as the only two authorized co-signatories as relates to any operations on the funds credited to the estates of bankruptcies and proposals administered by Domenic A. Giustini;
2. to make no debit and/or payment and/or transfers on funds credited or ought to have been credited to the estates of bankruptcies and proposals administered by Domenic A. Giustini without the countersignature of Bill Webster or Glenn Schmid;
3. to not pay, out of these accounts, cheques, bills of exchange, bank drafts or other instruments, issued before the receipt of these directions which are presented for payment after the receipt of these directions without these cheques, bills of exchange or drafts or other instruments being countersigned by Bill Webster or Glenn Schmid;

That these directions take effect immediately and will remain in effect until such time as the undersigned is satisfied that they are no longer required;

That in accordance with section 14.03(3) of the Act, these directions bind the addressee, who must comply with them;

That, pursuant to section 14.03(4) of the Act, a person who complies with this direction is not liable for any act done by that person only to comply with this direction.

Signed at the City of London, Ontario, this 8th day of February, 2010.

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Fred Sheeler
Assistant Superintendent
Office of the Superintendent of Bankruptcy

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