| Notice of
error
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264. (1) A director or officer of a
cooperative shall, without delay, notify the
auditor and the audit committee, if any, of any
error or misstatement of which the director or
officer becomes aware in a financial statement
that the auditor or a former auditor has
reported on.
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| Errors in
financial
statements
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(2) If the auditor or former auditor of a
cooperative is notified or becomes aware of an
error or misstatement in a financial statement
on which the auditor or former auditor has
reported, and if in their opinion the error or
misstatement is material, the auditor or former
auditor must inform each director
accordingly.
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| Duty of
directors
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(3) When under subsection (2) the auditor
or former auditor informs the directors of an
error or misstatement in a financial statement,
the directors shall
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(a) prepare and issue revised financial
statements; or
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(b) otherwise inform the members and
shareholders and, if the cooperative is one
that is required to comply with section 252,
inform the Director of the error or
misstatement in the same manner as it
informs the members.
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| Qualified
privilege
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265. Any oral or written statement or report
made under this Act by the auditor or former
auditor of a cooperative has qualified
privilege.
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| Definitions
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266. The definitions in this section apply in
this Part.
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``event of
default''
« cas de
défaut »
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``event of default'' means, in relation to a trust
indenture, an event specified in the trust
indenture on the occurrence of which the
principal, interest and other money payable
under the trust indenture become or may be
declared to be payable before maturity, but
the event is not an event of default until all
the conditions set out in the trust indenture
in connection with the giving of notice of
the event have been satisfied or the period
for giving the notice has elapsed.
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``guarantor''
« caution »
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``guarantor'' means a person that has
guaranteed an obligation of an issuer under
a trust indenture.
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``issuer''
« émetteur »
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``issuer'' means a cooperative that has issued,
is about to issue or is in the process of
issuing debt obligations.
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``trustee''
« fiduciaire »
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``trustee'' means a person appointed as trustee
under the terms of a trust indenture to which
a cooperative is a party, and includes a
successor trustee.
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``trust
indenture''
« acte de
fiducie »
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``trust indenture'' means a deed, indenture or
other document, including a supplement or
amendment to such a document, made by a
cooperative under which the cooperative
issues debt obligations and in which a
person is appointed as trustee for the
holders of the debt obligations issued under
it.
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| Application
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267. (1) This Part applies to a trust indenture
if the debt obligations issued or to be issued
under it are part of a distribution to the public.
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| Exemptions
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(2) The Director may, in writing, exempt a
trust indenture from the application of this
Part if, in the Director's opinion, the trust
indenture and the debt obligations under it are
subject to a law of another jurisdiction that is
substantially equivalent to the provisions of
this Act relating to trust indentures.
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| Conflict of
interests
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268. (1) No person may be appointed as
trustee if there is a material conflict of
interests between the person's role as trustee
and any other role of the person.
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| Eliminating
conflict of
interests
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(2) A trustee must, no later than ninety days
after the trustee becomes aware that a material
conflict of interests exists,
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(a) eliminate the conflict of interests; or
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| Validity
despite
conflict
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269. A trust indenture, any debt obligations
issued under it and the security interest
effected by them are valid even if there is a
material conflict of interests of the trustee.
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| Removal of
trustee
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270. If a trustee is appointed in
contravention of subsection 268(1) or if a
trustee contravenes subsection 268(2), any
interested person may apply to a court for an
order that the trustee be replaced, and the court
may make an order on any terms that it thinks
fit.
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| Trustee
application
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271. A trustee, or at least one of the trustees
if more than one is appointed, must be a trust
company incorporated under the laws of
Canada or a province and authorized to carry
on business as a trustee.
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| List of
security
holders
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272. (1) A holder of debt obligations issued
under a trust indenture may, on payment to the
trustee of a reasonable fee and on delivery of
a statutory declaration to the trustee, require
the trustee to provide, no later than fifteen
days after the delivery to the trustee of the
statutory declaration, a list setting out the
following information, as shown on the
records maintained by the trustee on the day
the statutory declaration is delivered to the
trustee:
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(a) the names and addresses of the
registered holders of the outstanding debt
obligations;
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(b) the principal amount of outstanding debt
obligations of each such holder; and
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(c) the total principal amount of debt
obligations outstanding.
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| Duty of issuer
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(2) On the demand of a trustee, the issuer
must provide the trustee with the information
required to enable the trustee to comply with
subsection (1).
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| When
applicant is
entity
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(3) If the person requiring the trustee to
provide a list under subsection (1) is an entity,
the statutory declaration required under that
subsection may be made by a director or an
officer of the entity or a person acting in a
similar capacity.
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| Contents of
statutory
declaration
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(4) The statutory declaration must state
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(a) the name and address of the person
requiring the trustee to provide the list and,
if the person is an entity, its address for
service; and
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(b) that the list will not be used except as
permitted by subsection (5).
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| Use of list
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(5) No person shall use a list obtained under
this section except in connection with
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(a) an effort to influence the voting of the
holders of debt obligations;
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(b) an offer to acquire debt obligations; or
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(c) any other matter relating to the debt
obligations or the affairs of the issuer or
guarantor of them.
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| Compliance
with trust
indentures
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273. (1) An issuer or a guarantor of a debt
obligation issued or to be issued under a trust
indenture must provide the trustee with
evidence of compliance with the conditions in
the trust indenture before undertaking
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(a) the issue, certification and delivery of
debt obligations under the trust indenture;
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(b) the release, or release and substitution,
of property subject to a security interest
constituted by the trust indenture; or
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(c) the satisfaction and discharge of the trust
indenture.
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| Compliance
by issuer or
guarantor
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(2) On the demand of a trustee, the issuer or
guarantor must provide the trustee with
evidence of compliance with the conditions in
the trust indenture by the issuer or guarantor in
respect of any act to be done by the trustee at
the request of the issuer or guarantor.
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| Evidence of
compliance
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(3) The following documents constitute
evidence of compliance for the purposes of
subsections (1) and (2):
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(a) a statutory declaration or certificate
made by a director or an officer of the issuer
or guarantor stating that the conditions
referred to in subsections (1) and (2) have
been complied with;
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(b) an opinion of legal counsel that the
conditions of the trust indenture requiring
review by legal counsel have been
complied with, if the trust indenture
requires compliance with conditions that
are subject to review by legal counsel; and
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(c) an opinion or report of the auditors of the
issuer or guarantor, or any other accountant
that the trustee selects, that the conditions
of the trust indenture have been complied
with, if the trust indenture requires
compliance with conditions that are subject
to review by auditors or accountants.
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| Further
evidence of
compliance
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(4) The evidence of compliance described
in subsection (3) must include a statement by
the person giving the evidence
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(a) declaring that the person has read and
understands the conditions of the trust
indenture referred to in subsections (1) and
(2);
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(b) describing the nature and scope of the
examination or investigation on which the
person based the certificate, statement or
opinion; and
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(c) declaring that the person has made any
examination or investigation that the person
believes necessary to enable the statements
to be made or the opinions contained or
expressed in the statement to be given.
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| Trustee may
require
evidence
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274. (1) On request of a trustee, the issuer or
guarantor must provide the trustee with
evidence in any form that the trustee requires
of compliance with any condition relating to
any action required or permitted to be taken by
the issuer or guarantor under the trust
indenture.
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| Certificate of
compliance
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(2) At least once in each twelve month
period beginning on the date of the trust
indenture and at any other time on the demand
of a trustee, the issuer or guarantor must
provide the trustee with a certificate stating
that the issuer or guarantor has complied with
all requirements contained in the trust
indenture that, if not complied with, would,
with the giving of notice, lapse of time or
otherwise, constitute an event of default, or, if
there has been failure to so comply, giving
particulars of the failure.
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| Notice of
default
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275. A trustee must, no later than thirty days
after the trustee becomes aware of the
occurrence of an event of default, give to the
holders of debt obligations issued under a trust
indenture notice of every event of default
arising under the trust indenture and
continuing at the time the notice is given,
unless the trustee believes on reasonable
grounds that it is in the best interests of the
holders of the debt obligations to withhold the
notice and so informs the issuer and guarantor
in writing.
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| Duty
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276. (1) In exercising powers and
discharging duties, the trustee must
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(a) act honestly and in good faith with a
view to the best interests of the holders of
the debt obligations issued under the trust
indenture; and
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(b) exercise the care, diligence and skill of
a reasonably prudent trustee.
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| Reliance on
statements
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(2) Despite subsection (1), a trustee is not
liable if the trustee relies in good faith on
statements contained in a statutory
declaration, certificate, opinion or report that
complies with this Act or the trust indenture.
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| No
exculpation
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277. No term of a trust indenture or of an
agreement between a trustee and the holders
of debt obligations issued under the indenture
or agreement or between the trustee and the
issuer or guarantor operates to relieve a trustee
from the duties imposed on the trustee by this
Part.
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| Functions of
receiver
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278. (1) Subject to the rights of secured
creditors, a receiver of any property of a
cooperative may
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(a) receive the income from the property
and pay the liabilities connected with it; and
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(b) realize the security interest of those on
whose behalf the receiver is appointed.
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| If receiver not
manager
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(2) Despite subsection (1) but subject to any
order that the court may make under section
282, a receiver who is not appointed manager
of the cooperative may not carry on the
business of the cooperative.
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Functions of
receiver-
manager
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279. Despite section 278, if a receiver of a
cooperative is also appointed manager of the
cooperative, the receiver may carry on any
business of the cooperative to protect the
security interest of those on whose behalf he
or she was appointed.
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| Directors'
powers cease
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280. If a receiver or receiver-manager is
appointed by a court or pursuant to an
instrument, no director shall exercise the
directors' powers that the receiver or
receiver-manager is authorized to exercise
until the receiver or receiver-manager is
discharged.
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| If receiver
appointed by
court
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281. (1) A receiver or receiver-manager
appointed by a court must act in accordance
with any directions of the court.
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| If receiver
appointed
pursuant to
instrument
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(2) A receiver or receiver-manager
appointed pursuant to an instrument must act
in accordance with the instrument and any
direction that the court may make under
section 282.
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| Duty
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(3) A receiver or receiver-manager must
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(a) act honestly and in good faith; and
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(b) deal with any property of the
cooperative in their possession or control in
a commercially reasonable manner.
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| Directions
given by court
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282. (1) A court may, on the application of
a receiver or receiver-manager appointed by a
court or pursuant to a document, or any other
interested person, make any order giving
directions on any matter relating to the duties
of the receiver or receiver-manager appointed
by it or pursuant to a document that it
considers appropriate, including an order
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(a) appointing, replacing or discharging a
receiver or receiver-manager and
approving the accounts of the receiver or
receiver-manager;
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(b) determining the notice to be given to any
person or dispensing with notice to any
person;
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(c) fixing the remuneration of the receiver
or receiver-manager;
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(d) requiring the receiver or
receiver-manager, or a person by or on
behalf of whom the receiver or
receiver-manager was appointed, to make
good any default in connection with the
receiver's or receiver-manager's custody or
management of the property and business of
the cooperative, or relieving a receiver or
receiver-manager, or a person by or on
behalf of whom a receiver or
receiver-manager was appointed, from any
default on any terms that the court considers
appropriate;
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(e) confirming any act of the receiver or
receiver-manager; and
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(f) giving directions on any other matter
relating to the duties of the receiver or
receiver-manager.
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| Required
action
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283. A receiver or receiver-manager must
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(a) take the property of the cooperative into
custody and control in accordance with the
court order or instrument pursuant to which
the receiver or receiver-manager is
appointed;
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(b) open and maintain a bank account as
receiver or receiver-manager of the
cooperative for the money of the
cooperative coming under their control;
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(c) keep detailed accounts of all
transactions carried out as receiver or
receiver-manager;
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(d) keep accounts of the administration as
receiver or receiver-manager and cause
them to be made available during usual
business hours for inspection by the
directors;
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(e) prepare, at least once in every six month
period after the day of appointment,
financial statements of the administration,
as far as is feasible, in the form required by
section 247;
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(f) on completion of their duties, render a
final account of the administration in the
form that the receiver or receiver-manager
has adopted for preparation of interim
accounts under paragraph (e); and
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(g) if section 252 would otherwise apply,
file with the Director a copy of any financial
statement mentioned in paragraph (e) and
any final account mentioned in paragraph
(f) not later than fifteen days after it is
prepared or rendered.
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