I can put it upon Hansard now. If my hon. friends so desire, I will place on Hansard, for the information of hon. members so that they will have it on hand to-morrow morning, the statement that was sent to Mr. Lee, chairman of the Home Bank Depositors' Relief Association, and signed by Mr. Clarkson. The statement is as follows:
November 26, 1924.
W. T. J. Lee, Esq.,
Chairman of the Home Bank Depositors' Relief Association.
Dear Mr. Lee :
You have informed me that it is necessary for the national committee representing Home Bank depositors to be informed as to the extent of the realization to date upon the assets of the Home Bank of Canada; also to be informed-so far as can presently be determined-as to what the prospects for payment of a further dividend to depositors are, including my estimate of what the assets remaining to be realized are likely to produce.
In reply to your enquiry I would state that the amount realized to date from assets of the bank which have been liquidated is approximately $6,496,896, which sum has been disposed of in the manner following,
Paid to creditors-
(a) Circulation redeemed $1,610,550(b) Payments made on account of secured and preferred cflaims.. .. 383,610(c) Dividend paid to creditors-25 percent
3,845,628(d) Advances to Home Bank Depositors' Relief Association on account of future dividends payable to creditors, as per white slips of assignment
19,802(e) Interest paid upon circulation, preferred claims and 'borowings necessary to pay dividend of 25 per cent
Advances made in protection of unrealized assets 226,203
Costs of operation of Home Bank of Canada in period between the date of suspension (August 17, 1923) and date of winding-up order (October
8, 1923) 86,724
Salaries of staff, rentals and general expenses in connection with liquidation for period between October 8, 1923 and November 24, 1924.. 96,043
Payments in respect of curator's and [DOT]liquidator's remuneration and law
costs to November 24, 1924 52,409
Cash on hand 50,700
Relative to the above expenditures and for your further information I would state that-
(1) All circulation of the Home Bank of Canada has been redeemed except $113,615 thereof which is still outstanding-as against this outstanding circulation the sum of $103,000 stands deposited with the Dominion government.
(2) Preferred claims outstanding and still unpaid at this date include an amount of $49,916 due to the Dominion government, and $1,140,275 due to the
province of Ontario. The claim of the Dominion government will be liquidated forthwith while payments of aproximately $168,000 were recently made to the province of Ontario.
(3) All borrowings from Canadian banks to permit payment of 25 per cent dividend disbursed to creditors on December 22, 1923, have been fully liquidated, while $3,875,200 deposited with Canadian banks for the purpose of meeting such dividend has all been withdrawn by creditors except to the extent of approximately $100,000 which remains deposited in various banks subject to withdrawal by creditors.
(4) The advances of $226,203 made by the estate m protection of assets have been largely applied to the liquidation of prior liens and the payment of taxes and interest. The sums so advanced are expected to be recovered in full.
(5) Following the suspension of the Home Bank of Canada and until such time as it could be determined whether the bank would be able to resume business or must be wound up, it was necessary to maintain the branches of the Home Bank under control of the board of directors of the bank but subject to the supervision of the curator and within such period, which commenced on August 18, 1923, and ended on October 8, 1923, when the bank was ordered to be wound up, the curator was without power to dose the branches of the bank. The pay-roll of the bank at the time amounted to $416,000 per annum and rental charges to $188,000 per annum, and at such rates wages and rents payable for the period amounted to $86,724.
(6) Following the granting of the order for winding up the bank on October 8, 1923, steps were taken by the interim liquidators to reduce the operating expenses, but the heavy burden and expenses could not immediately be avoided due to the necessity of obtaining much essential information. Thereafter, however, the staff was consistently reduced and premises given up until at the present time expenses are at a minimum. Wages of employees, rentals of bank premises and general expenses since the date of liquidation have under the above circumstances amounted to $96,043.
In addition to the information above set forth you have asked that I give you my estimate of what I consider to be the probable realizable value of the assets remaining to be liquidated. You will appreciate that it is very difficult to make such an estimate as a number of the assets are the subject matter of litigation, while amounts likely to be recovered from others are very largely and in some cases entirely dependent upon various contingencies and the future prosperity of the country, I have, however, made a careful computation of what I believe is likely to be recovered, and so far as can humanly be seen, the assets remaining to be realized should produce between $2,750,000 and $3,000,000 as a minimum and $4,000,000 to $4,500,000 as a maximum. Out of the amount so to be realized, however, preferred claims of approximately $1,250,000 have first to ^>e pafd, also the costs of important litigation now in force and those incident to liquidation.
In these circumstances unless the improbable shall happen or unexpected success be met with in the realization of the assets remaining, I do not feel that creditors are safe in relying upon the receipt of a further dividend of more than 10 per cent, and then only if the litigation hereinafter mentioned shall be determined in favor of the bank.
Certain legal actions of outstanding importance to the bank are now in force or about to be commenced, and they consist of-
(a) Action taken by the liquidators of the bank to compel payment of double liability upon capital stock of the bank where holders thereof deny responsibility.
(b) Action taken by the liquidators against the directors of the Home Bank of Canada for misfeasance.
(c) Actions about to be taken by the liquidators of the bank as a test case to compel the payment of cheques deposited in the bank on the day of suspension, payment of such cheques having been refused by the makers thereof.
(d) Action about to be taken by depositors against the liquidators of the bank in test cases for the return to them of moneys deposited in the bank shortly preceding its suspension, on the ground that the bank was insolvent at the time to the knowledge of its directors and unable to properly receive such deposits.
If the action brought by the liquidators in connection with double liability shall be determined in favor of the shareholders w'ho are contesting the right of the liquidators to recover, the bank will probably require tv) refund upwards of $250,000 already collected on double liability and it will also lose not less than $250,000 more which could be collected from such shareholders if held to be liable. In the event that the liquidators shall succeed in their action for misfeasance against the directors and also be found to be entitled to payment of the cheques deposited in the Home Bank of Canada on August 17, 1923, the estate will probably recover several hundred thousand dollars from such surces. On the other hand should the bank fail in such actions, my estimate of probable recoveries from the assets of the bank still in hand would be substantially reduced.
In the further event that creditors who made deposits with the bank within a limited period prior to its suspension shall be found entitled to recover the same, the estate of the Home Bank of Canada will probably require to pay between $250,000 and $400,000 to such creditors, and this amount would have to be disbursed out of the estate in priority to dividends to creditors.
Under the above circumstances it must be apparent that it is impossible at this juncture to prepare a statement which will with any degree of definiteness indicate the ultimate result of the liquidation or the amount of dividend still to accrue to creditors. The best estimate which I can give is that with reasonable success met with in the litigation above mentioned a further dividend of upwards of 10 per cent should be payable, but I wish to make it clear to you that this amount would probably be substantially reduced if the litigation above mentioned shall be determined against the bank to any important extent.
G. T. Clarkson.
I have in my hand a memorandum that I quite overlooked, that the liquidators have offered to distribute this money without one cent of cost to the depositors or to the government.
Subtopic: PROPOSED PAYMENT OF DEPOSITORS TO THE AMOUNT OF $5,450,000