Federal Security Interests Research Study and Report 2000

APPENDIX J

Summary of miscellaneous legislative and regulatory provisions

Canada Business Corporations Act, s. 82-95, and 189(1).

Sections 82 to 95 outline the procedure that must be followed by a trustee under the terms of a trust indenture in the event of default (i.e. where a security interest constituted by the trust indenture becomes enforceable, or where the principal, interest and other moneys payable thereunder become or may be declared to be payable before maturity).; Pursuant to section 85, for example, a holder of debt obligations issued under a trust indenture may require the trustee to furnish a list setting out the names and addresses of the registered holders of the outstanding debt obligations, the principal amount of outstanding debt obligations owned by each such holder, and the aggregate principal amount of debt obligations outstanding as shown on the records maintained by the trustee.; Under section 86, an issuer or a guarantor of debt obligations issued or to be issued under a trust indenture must the trustee with evidence of compliance with certain conditions in the trust indenture.; Section 90 also forces the trustee to give notice of every event of default arising under the trust indenture to the holders of debt obligations issued under a trust indenture within thirty days after the trustee becomes aware of the occurrence thereof.;

Section 189(1)(d) states that unless the articles or by-laws of or a unanimous shareholder agreement relating to a corporation otherwise provide, the articles of a corporation are deemed to state that the directors of a corporation may, without authorization of the shareholders, “mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the corporation, owned or subsequently acquired, to secure any obligation of the corporation”.

Canada Cooperative Associations Act, R.S.C. 1985, c. C-40, s. 91-93.

Section 90(1)(e) empowers the directors of a cooperative association to “secure any debentures or other securities, or any other present or future borrowing or liability of the association, by mortgage, charge or pledge of all or any currently owned or subsequently acquired real and personal property of the association, and the undertaking and rights of the association”.; Section 93 states that a cooperative association must deliver to the Minister the particulars of certain types of mortgages or charges created by the associations.

Canada Cooperatives Act, 1998, c. 1, s. 267-280.

Sections 267-280 are identical to sections 82-95 of the CBCA (described above).

Canada Corporations Act, R.S.C. 1970, c. C-32, s. 68.

Section 68 states that a corporation must deliver to the Minister the particulars of certain types of mortgages or charges created by the corporation.

Expropriation Act, R.S.C. 1985, c. E-21, s. 26(10) and 33.

Subsection 26(10) outlines the methodology for calculating the value of an expropriated interest subject to a security interest.;;

Section 33 outlines the procedure for calculating the compensation to which the holder of a security interest on an expropriated land is entitled.

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