By Mark Taggart, General Counsel at Department of Justice Canada 

Licensed Insolvency Trustees (LITs) play a pivotal role in Canada’s insolvency system. Entrusted with the exclusive right to provide insolvency services, LITs operate within a tightly regulated framework that ensures their conduct meets high professional standards. This forthcoming book offers a timely and comprehensive guide to the regulation of LITs, shedding light on the mechanisms that govern their practice and the implications for stakeholders across the insolvency and restructuring industry.

The book outlines the full spectrum of regulatory tools available to the Superintendent—from recommending fee reductions to discouraging mismanagement, to imposing restrictions on an LIT’s ability to administer estates, and, in the most serious cases, cancelling licences or pursuing criminal sanctions. Drawing on administrative decisions, court rulings, government reports, and academic commentary, the book consolidates resources that are currently scattered across various platforms, making it an essential reference for both practitioners and stakeholders.

Importantly, the book is not only for LITs. Many individuals and organizations are drawn into insolvency proceedings involuntarily and may be unfamiliar with the trustee’s role. For these readers, the book serves as a practical guide to understanding their rights and the avenues available to address misconduct. For LITs, it offers insights into best practices and strategies for maintaining a compliant and efficient practice.

While the text necessarily examines cases of professional misconduct, it emphasizes that such instances are rare. As noted by the Superintendent of Bankruptcy in 1939:

“Ordinarily, trustees generally carry out their duties capably and efficiently and the maladministration or incompetence of a few indicates all the more the credit due to efficient trustees.”

This book will be available through LexisNexis Canada in September 2025.

The author has provided a brief overview of his book, which outlines his views and research into the regulation of Licensed Insolvency Trustees in the Canadian insolvency system.