REPORT OF KPMG INC., THE LIQUIDATOR OF CONFEDERATION LIFE ...€¦ · REPORT OF KPMG INC., ... of Confederation Life Insurance Company ... before the liquidation but had not been

Commercial List Court File No. 97-BK-000543

ONTARIO SUPERIOR COURT OF JUSTICECOMMERCIAL LIST

IN THE MATTER OFCONFEDERATION LIFE INSURANCE COMPANY

AND IN THE MATTER OF THEINSURANCE COMPANIES ACT, S.C. 1991, AS AMENDED

AND IN THE MATTER OF THEWINDING-UP ACT, R.S.C. 1985, C. W-11, AS AMENDED

B E T W E E N:

THE ATTORNEY GENERAL OF CANADA

Applicant

- and -

CONFEDERATION LIFE INSURANCE COMPANY

Respondent

REPORT OF KPMG INC., THE LIQUIDATOR OFCONFEDERATION LIFE INSURANCE COMPANY

(Motion Returnable November 29, 2000)

November 24, 2000

TABLE OF CONTENTS

I. NATURE OF THE MOTION ................................................................................................ 3

II. BACKGROUND .................................................................................................................... 4

III. CONFED RETIREES............................................................................................................. 5A. Retiree Benefits Claim ............................................................................................ 5B. Modification of the Allowance Process .................................................................. 7

IV. THE FIRST SUPPLEMENTAL DIVIDEND SHEET........................................................... 8

V. RELIEF SOUGHT................................................................................................................ 11






B E T W E E N:


Applicant

- and -


Respondent

REPORT OF KPMG INC., THE LIQUIDATOR OFCONFEDERATION LIFE INSURANCE COMPANY

(Motion Returnable November 29, 2000)

NOVEMBER 24, 2000

I. NATURE OF THE MOTION

1. This Report is filed in support of a motion by KPMG Inc., the liquidator (the

“Liquidator”) of Confederation Life Insurance Company (“Confed”), for an Order:

(a) approving the first supplemental dividend sheet in the form attached as Schedule

“A” hereto (the “First Supplemental Dividend Sheet”) and authorizing the

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Liquidator to make distributions from time to time to the holders of allowed

claims set out on the First Supplemental Dividend Sheet; and

(b) abridging the time for service of notice of this Motion.

II. BACKGROUND

2. On August 15, 1994, this Court ordered that Confed be wound-up pursuant to the

Winding-up Act (now the Winding-up and Restructuring Act). By further order of the same date,

the Court appointed the Superintendent of Financial Institutions (the “Superintendent”)

provisional liquidator of Confed. The Superintendent appointed KPMG Inc. as his agent to

assist in the administration of the liquidation. The liquidation was deemed to commence

August 12, 1994.

3. On September 10, 1997, this Court discharged the Superintendent as provisional

liquidator of Confed and appointed KPMG Inc. as permanent liquidator.

4. The Liquidator called for claims from ordinary creditors other than those holding

subordinated debt (the “Ordinary Creditors”) and policyholders asserting additional policyholder

claims. February 15, 2000 was fixed as the last day on or before which proofs of claim were to

be filed with the Liquidator.

5. The process for disallowing and admitting Ordinary Creditor claims to the estate

was approved by this Court by Orders dated May 5, 2000 and June 20, 2000, copies of which are

attached as Schedules “B” and “C”, respectively. The process for admitting claims will be

referred to as the “Allowance Process”. The Liquidator has commenced but not completed the

Allowance Process. A number of claims are still under consideration and others have been

disallowed.

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6. On September 5, 2000, this Court approved and authorized a first interim

distribution by the Liquidator from the estate of Confed to Confederation Treasury Services

Limited and to the Ordinary Creditors in the total amount of $260 million. This Court also

approved a dividend sheet (the “Dividend Sheet”) and authorized the Liquidator to make

distributions from time to time to the holders of allowed claims set out on the Dividend Sheet. A

copy of the Order of this Court dated September 5, 2000 is attached hereto as Schedule “D”.

7. The Liquidator has paid a first dividend to the holders of allowed claims set out

on the Dividend Sheet equivalent to 22.0108 cents on the dollar.

III. CONFED RETIREES

A. Retiree Benefits Claim

8. As part of its employee compensation package, Confed provided its retired

employees (the “Confed Retirees”), their spouses and dependent children with group medical

and dental benefits and group life insurance benefits (the “Retiree Benefits”). The Retiree

Benefits were to continue for the lifetime of the Confed Retirees.

9. Early in the liquidation, the Liquidator sought the advice and directions of this

Court with respect to, among other things, the issue of whether the claims of the retirees of

Confed’s Canadian operations (the “Canadian Operations Retirees”) for Retiree Benefits were

entitled to priority in the estate of Confed. Pending a determination of that issue, the Liquidator

continued the Retiree Benefits for the Canadian Operations Retirees.

10. In a decision dated July 4, 1995, this Court held that the Canadian Operations

Retirees’ claims for Retiree Benefits ranked as ordinary creditor claims and were not entitled to

priority in the estate. The Liquidator, therefore, discontinued the payment of Retiree Benefits to

the Canadian Operations Retirees effective August 31, 1995.

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11. There are 689 Confed Retirees, many of whom are elderly and living on a fixed

income. As the Retiree Benefits were to continue for the lifetime of the Confed Retirees, the

amount of each Confed Retiree’s claim is dependent on the age of the Confed Retiree and

applicable mortality assumptions. Given all of the circumstances, the Liquidator was concerned

that individual Confed Retirees might have difficulty in preparing and proving their claims.

12. Accordingly, as part of the call for claims process, the Liquidator sought the

appointment of Susan Rowland as representative counsel (the “Representative Counsel”) to help

the Confed Retirees prepare and prove their claims. A copy of the Order dated October 7, 1999

appointing the Representative Counsel is attached hereto as Schedule “E”.

13. The October 7, 1999 Order of this Court also authorized the Representative

Counsel to retain actuarial advice. The Representative Counsel retained Eckler Partners to assist

with the calculation of the quantum of the Retiree Benefits claim. The Representative Counsel

filed one omnibus proof of claim on behalf of the Confed Retirees.

14. Eckler Partners calculated the Retiree Benefits claim in accordance with generally

accepted actuarial principles. Each claim was determined as the present value of the foregone

benefits as at August 31, 1995 (being the date on which the Liquidator ceased paying claims for

Retiree Benefits). The present value of the medical and dental benefits was based on the

expected future payout for each individual using an average annual health care cost determined

on the basis of past claims experience of the Confed Retirees as a group. The present value of

the group life benefit was based on the expected future payout for each individual using their

actual amounts of term life insurance coverage reflecting future reductions in such coverage, if

applicable.

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15. The Liquidator worked closely with the Representative Counsel and Eckler

Partners. The Liquidator sought and obtained a favourable ruling from Canada Customs and

Revenue Agency with respect to the Canadian Operations Retirees.

16. The Liquidator and the Representative Counsel agreed on the approach to the

valuation of the claims of Canadian Operations Retirees and the quantum of each claim of the

Canadian Operations Retirees (the “Agreed Claim”). There are 655 Canadian Operations

Retirees.

17. At this time, the tax issues surrounding the claims of the 34 retirees of Confed’s

U.S. operations have not been resolved. Accordingly, the Agreed Claim does not include the

claims of those Confed Retirees.

B. Modification of the Allowance Process

18. By Order dated September 26, 2000, this Court approved the modification of the

Allowance Process with respect to the claims of the Canadian Operations Retirees. A copy of

the Order of this Court dated September 26, 2000 is attached hereto as Schedule “F”.

19. In accordance with the modified Allowance Process, the Representative Counsel

mailed a letter to each Canadian Operations Retiree setting out the amount of the individual’s

Agreed Claim. Attached hereto as Schedule “G” is a copy of an Affidavit of Service confirming

such mailing.

20. Pursuant to the modified Allowance Process, any Canadian Operations Retiree

who wished to object to the amount of his or her claim was required to serve his or her written

objection by pre-paid ordinary mail, facsimile or courier on the Representative Counsel within

twenty-one days of the letter referred to above. The time for objecting expired on October 31,

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2000. The Representative Counsel confirms that as at October 31, 2000, there were no

outstanding objections to the valuation of the Retirees’ benefits claims.

IV. THE FIRST SUPPLEMENTAL DIVIDEND SHEET

21. In accordance with the Allowance Process, as modified with respect to the

Canadian Operations Retirees, the Liquidator mailed a list of claims it proposed to allow on

November 2, 2000 (the “November Allowed Claims”). A copy of the list is attached hereto as

Schedule “H”. The November Allowed Claims consist of:

(a) the Canadian Operations Retirees’ claim, in the amount $16,728,264.57. This

amount does not include the claims of two Canadian Operations Retirees whose

entitlement the Liquidator is still considering and one former employee who died

before the liquidation but had not been removed from Confed’s retiree register;

(b) claims of two commercial paper holders in the approximate amount of $330,000

representing the balance of the principal amounts shown on the Dividend Sheet;

(c) a claim under a lease in the United Kingdom in the amount of $678,381.12. The

Liquidator has received an opinion from its counsel in the United Kingdom that

the claim is valid and should be allowed;

(d) claims for costs and prejudgment interest relating to actions brought by

policyholders for the payment of disability payments which had originally been

denied by Confed, in the approximate amount of $230,000. These amounts were

all fixed in judgments obtained by the policyholders. The amount of the claim

relating to the disability benefits was paid as a policyholder claim at the time of

judgment. Claims for interest and costs awards are not provided for under the

terms of the policies and are therefore Ordinary Creditor claims; and

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(e) miscellaneous claims in the approximate amount of $800,000 being trade

creditors. The Liquidator has reviewed these claims, which are consistent with

Confed’s books and records.

Claims in Pounds Sterling and U.S. dollars have been converted to Canadian dollars pursuant to

the June 20, 2000 Order of this Court.

22. The period for objection expires on November 27, 2000. The Liquidator has

received no objections to the November Allowed Claims as of the date of this report. The

Liquidator will provide a supplementary report to the Court confirming the status as at

November 28, 2000.

23. The First Supplemental Dividend Sheet includes all of the November Allowed

Claims, subject to two amendments:

(a) one claim for interest and costs relating to a disputed disability payment was

incorrectly shown in the amount of $190,000; the correct amount is $55,600; and

(b) one claim in the amount of $985.34 was incorrectly included.

24. The Liquidator proposes to pay a first interim dividend to the Ordinary Creditors

listed on the First Supplemental Dividend Sheet when approved.

25. The Liquidator is continuing to review the balance of the claims. The Liquidator

will make dividend payments to additional Ordinary Creditors as their claims are allowed and

will adjust payments to reflect the higher percentage available when material claims are

disallowed or withdrawn.

26. The Liquidator wanted to make distributions in respect of the November Allowed

Claims before the Christmas holidays, subject to this Court’s approval. Accordingly, although

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the time for objections had not yet expired, the Liquidator sent a letter to the parties on the

service list in this matter on November 10, 2000, advising them that this motion would be

brought on November 29, 2000 and circulating the list of November Allowed Claims. A copy of

that letter is attached hereto as Schedule “I”. The Liquidator is therefore seeking the approval of

this Court to serve of this Report on an abridged basis.

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V. RELIEF SOUGHT

27. The Liquidator therefore seeks an Order:

(a) approving the First Supplemental Dividend Sheet and authorizing the Liquidator

to make distributions from time to time to the holders of November Allowed

Claims set out on the First Supplemental Dividend Sheet; and

(b) abridging the time for service of notice of this Motion.

ALL OF WHICH IS RESPECTFULLY SUBMITTED

KPMG INC., solely in its capacity as theLiquidator of Confederation Life InsuranceCompany

G26\4351732.3

SCHEDULE “A”IN THE MATTER OF THE LIQUIDATION OF

CONFEDERATION LIFE INSURANCE CO

First Supplemental Dividend Sheet

Claim AmountClaim AdmittedNo. Creditor Cdn Dollars

0011 Diamond Taxicab Association 1,175.42

0013 Gauley & Co. 20,432.77

0021 Xerox Canada Ltd, Major Acc. 488,766.71

0048 Medhurst, Marilyn 10,204.41

0051 Robb Research Services Limited 3,472.90

0088 Hanewich-Matheson, Sharon 12,434.36

0089 MacPherson, William 92,500.00

0100 Daly, Darlene 21,500.00

0103 Adecco Cda Inc. DGS Personnel 10,691.21

0145 Eckler Partners Ltd 51,828.30

0148 CBA QS Limited 32,029.50

0154 Cadofte,Josee 9,500.00

0190 Health Care Corp of St. John’s 1,875.00

0191A Abitibi-Consolidated Inc. 93,393.18

0256 Carillion Construction Limited 678,381.12

0284 Haines, Miller & Associates Inc. 30,092.98

0299 174068 Cda Inc. & Canamall 42,500.00

0306 Suissa, Albert 1,712.00

0350 Fleyfel, Marie Claude 10,000.00

0397A Dominion Textile Inc. 239,429.08

0584 Susan Rowland, Rep. Retirees 16,728,264.57

0600 DSB Refurbishment Limited (In 111,456.00

1035 Atcheson, David 61,002.84

1036 Stinchcombe, Roger J. 55,600.00

Total Creditors $18,808,242.34


SUPERIOR COURT OF JUSTICE- COMMERCIAL LIST

THE HONOURABLE MR. ) FRIDAY, THE 5TH DAYJUSTICE ROBERT A. BLAIR ) OF MAY, 2000



AND IN THE MATTER OF THEWINDING-UP ACT, R.S.C. 1985, C.W-11, AS AMENDED

B E T W E E N:


Applicant

- and -


Respondent

O R D E R

THIS MOTION, brought by KPMG Inc., the liquidator (the “Liquidator”) of

Confederation Life Insurance Company, was heard this day at 393 University Avenue, Toronto,

Ontario.

ON READING the Report of the Liquidator dated May 1, 2000, filed, and upon hearing

the submissions of counsel for the Liquidator,

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1. THIS COURT ORDERS that the service made of the Notice of Motion and supporting

materials herein is good and sufficient notice of this motion, that this motion is properly

returnable today and that any further service of the Notice of Motion and supporting materials be

and the same is hereby dispensed with.

2. THIS COURT ORDERS that the Liquidator file a statement of claimants and creditors

(the “Statement”) with the Office of the Superintendent of Financial Institutions in accordance

with Part III of the Winding-up Act as it was in force on August 15, 1994, as soon as practicable

after thirty days from the last date of publication of the notices provided for in paragraph 3 of

this Order.

3. THIS COURT ORDERS that the Liquidator publish a notice of the filing of the

Statement, in substantially the form attached hereto as Schedule “A”, in the Canada Gazette, in

the official gazette of each province and in the national edition of The Globe and Mail and the

The National Post, all as soon as practicable.

4. THIS COURT ORDERS that the Liquidator send a notice in substantially the form

attached hereto as Schedule “B” to those claimants or creditors having claims which are admitted

by the Liquidator (the “Allowed Claims”).

5. THIS COURT ORDERS that the notice advising policyholders, claimants or creditors

having claims which are disputed by the Liquidator (the “Disputed Claims”) that such Disputed

Claims will be disallowed, be a notice of disallowance substantially in the form annexed hereto

as Schedule “C” (the “Notice of Disallowance”).

6. THIS COURT ORDERS that the Notice of Disallowance be served by prepaid

registered mail or by facsimile on the policyholders, claimants or creditors having Disputed

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Claims at the address set out in the proof of claim filed by the policyholders, claimants or

creditors, as the case may be, or, in the case where only a facsimile number has been provided in

the proof of claim, to that facsimile number.

7. THIS COURT ORDERS that any policyholders, claimants or creditors wishing to

appeal a Notice of Disallowance serve the Liquidator with a Notice of Appeal, substantially in

the form attached hereto as Schedule “D”, by prepaid ordinary mail, facsimile or courier within

forty-five (45) days from the date of the Notice of Disallowance.

8. THIS COURT ORDERS that the Liquidator file a dividend sheet setting out details of

the Allowed Claims for approval by this Court from time to time prior to making any

distributions to the holders of Allowed Claims on account thereof.

__________________________________________________

G26\PAQUETTF\4317626.2

SCHEDULE “A”

Court File No. 97-BK-000543





B E T W E E N:

THE ATTORNEY GENERAL OF CANADAApplicant

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CONFEDERATION LIFE INSURANCE COMPANYRespondent

TO THE POLICYHOLDERS, CLAIMANTS AND CREDITORSOF CONFEDERATION LIFE INSURANCE COMPANY

On August 15, 1994, a winding-up order was granted in the Ontario Court (GeneralDivision) against Confederation Life Insurance Company, having its head office in the City ofToronto, in the Province of Ontario.

TAKE NOTICE THAT:

It is intended that a Statement of Claimants and Creditors shall be filed in the Office ofthe Superintendent of Financial Institutions pursuant to section 168(1) of the Winding-up andRestructuring Act, R.S.C. not less than thirty (30) days after the date of this publication.

KPMG Inc., the Liquidator ofConfederation Life Insurance Company800 Bay Street8th FloorToronto, OntarioM5S 3A9

SCHEDULE “B”

[On the Letterhead of Confederation Life Insurance Company in Liquidation]

TO: (IDENTIFY POLICYHOLDER, CREDITOR, OR CLAIMANT)

RE: (CLAIM)

We confirm receipt of your proof of claim dated . The Liquidator

has reviewed your claim and will allow your claim in the amount shown on your proof of claim.

Pursuant to the Winding-up Act (now the Winding-up and Restructuring Act), the

Liquidator is required to file a Statement of Claimants and Creditors with the Office of the

Superintendent of Financial Institutions. You will be shown as a claimant therein for the amount

claimed. You need take no further action to participate in future dividends.

Please keep the Liquidator advised of any change of address.

Yours very truly,

G26\4307218.8

SCHEDULE “C”


SUPERIOR COURT OF JUSTICECOMMERCIAL LIST




B E T W E E N:


Applicant

- and –


Respondent

NOTICE OF DISALLOWANCE OF CLAIM

TO: (IDENTIFY POLICYHOLDER, CREDITOR, OR CLAIMANT)

RE: (CLAIM)

TAKE NOTICE THAT as Liquidator of Confederation Life Insurance Company

(“Confed”) we have this day disallowed your claim against the estate on the following grounds:

AND FURTHER TAKE NOTICE THAT the Liquidator is filing the Statement

of creditors and claimants as provided in the Winding-up Act (now the Winding-up and

Restructuring Act) and that your claim will be shown thereon as nil.

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AND FURTHER TAKE NOTICE THAT if you are dissatisfied with our

decision in respect of your claim, you must serve the Liquidator by ordinary mail, fax or courier

at the address or fax number below with a Notice of Appeal, in the form attached hereto, within

forty-five (45) days of the date hereof, with support for your claim and containing the reasons for

disputing the decision of the Liquidator. Subject to the power of the Court to extend the time, no

application to revise or vary the decision in disallowing your claim will be entertained after the

expiration of forty-five (45) days from this date.

If no Notice of Appeal is served on the Liquidator within forty-five (45) days

hereof, then this Notice of Disallowance will be deemed final and conclusive and the Liquidator

shall conduct the liquidation and distribute the assets of Confed or any part thereof among the

persons entitled thereto without regard to your claim.

This notice is being served pursuant to the Winding-up Act and to the Order of _

dated the _ day of _, 2000.

DATED at the City of Toronto, this day of , 2000.

KPMG INC., the Liquidatorof Confederation LifeInsurance Company800 Bay Street, 8th FloorToronto, Ontario M5S 3A9

Attention: I. George GutfreundFax: (416) 323-2253

Per: _____________________________________

G26\4307218.8

SCHEDULE “D”


SUPERIOR COURT OF JUSTICECOMMERCIAL LIST




B E T W E E N:


Applicant

- and -


Respondent

NOTICE OF APPEAL OF DISALLOWANCE OF CLAIM

TO: KPMG INC., LIQUIDATOR OF CONFEDERATION LIFE INSURANCECOMPANY

FROM: [POLICYHOLDER, CLAIMANT OR CREDITOR]--- ADDRESS ---

RE: [CLAIM]

- 2 -

The policyholder, claimant or creditor herein disputes the Notice of Disallowance

of Claim dated the day of , 2000.

REASONS FOR APPEAL FROM DISALLOWANCE OF CLAIM

The policyholder, claimant or creditor disputes the Notice of Disallowance of

Claim for the reasons set out on Appendix “A”:

[You must attach an Appendix “A” setting out the reasons for the dispute]

In support of this appeal the policyholder, claimant or creditor submits the

evidence and documentation attached hereto as Appendix “B”.

[You must attach evidence/documentation to support your claim as

Appendix “B”]

DATED at the City of this day of , 2000

________________________________________________POLICYHOLDER, CLAIMANT OR CREDITOR

G26\4307218.8


Applicant

andCONFEDERATION LIFE INSURANCECOMPANY

Respondent

Commercial List Court File No: 97-BK-000543

SUPERIOR COURT OF JUSTICE– COMMERCIAL LIST

Proceeding commenced at Toronto

ORDER

GOODMAN PHILLIPS & VINEBERGBarristers & Solicitors250 Yonge StreetSuite 2400, Box 24Toronto, OntarioM5B 2M6

Gale Rubenstein\LSUC # 17088E

Tel: (416) 979-2211Fax: (416) 979-1234

Solicitors for KPMG Inc., the Liquidator ofConfederation Life Insurance Company

G26\PAQUETTF\4317626



THE HONOURABLE MR. ) TUESDAY, THE 20TH DAYJUSTICE ROBERT A. BLAIR ) OF JUNE, 2000




B E T W E E N:


Applicant

- and -


Respondent

O R D E R


Confederation Life Insurance Company (“Confed”), was heard this day at 393 University

Avenue, Toronto, Ontario.

ON READING the Report of the Liquidator dated June 15, 2000, filed, and upon

hearing the submissions of counsel for the Liquidator,

- 2 -

1. THIS COURT ORDERS that the service made of the Notice of Motion and

supporting materials herein is good and sufficient notice of this motion, that this motion is

properly returnable today and that any further service of the Notice of Motion and supporting

materials be and the same is hereby dispensed with.

2. THIS COURT ORDERS that the Liquidator be and it is hereby authorized to

send a list setting out the claims which it has determined ought to be admitted in substantially the

form attached hereto as Schedule “A” (the “Allowed Claims Sheet”), from time to time, as it

considers appropriate.


mail to each person who filed a proof of claim in the estate of Confed a letter in substantially the

form attached hereto as Schedule “B” enclosing a copy of the Allowed Claims Sheet, from time

to time, as it considers appropriate.

4. THIS COURT ORDERS that any creditor or claimant wishing to object to any

claim included on an Allowed Claims Sheet (an “Objecting Creditor”) shall serve a written

objection on the creditor or claimant whose claim is being objected to (the “Subject Creditor”)

including brief reasons for the objection, such service to be effected by means of prepaid

registered mail, facsimile or courier and to be received by the Subject Creditor within twenty-

five (25) days of the date of the letter referred to in paragraph 3 hereof.

5. THIS COURT ORDERS that any Objecting Creditor shall serve a copy of the

written objection on the Liquidator, together with proof of service of same on the Subject

Creditor, such service to be effected by means of prepaid registered mail, facsimile or courier

and to be received by the Liquidator within twenty-five (25) days of the date of the letter referred

to in paragraph 3 hereof.

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6. THIS COURT ORDERS that the Subject Creditor shall have six (6) days after

receipt of an objection to answer the objection in writing and to serve such answer on the

Objecting Creditor and to the Liquidator by means of prepaid registered mail, facsimile or

courier.

7. THIS COURT ORDERS that an Objecting Creditor shall have three (3) days

after receipt of an answer from a Subject Creditor to reply in writing and to serve such reply on

the Subject Creditor and the Liquidator by means of prepaid registered mail, facsimile or courier.

8. THIS COURT ORDERS that where any time period referred to in paragraphs 4

through 7 hereof expires on a day that is a Saturday, Sunday or holiday in the jurisdiction in

which the creditor required to effect service resides, service is to be effected on the next business

day thereafter.

9. THIS COURT ORDERS that where an objection has been raised and the parties

are unable to resolve the objection, the Liquidator may seek further directions from this Court or

the creditors in question may bring a motion to have the contestation heard by this Court.

10. THIS COURT ORDERS that where, after a claim has been duly objected to and

the Subject Creditor does not answer the objection, this Court may, on the application of the

Objecting Creditor, make an order barring the claim or such other order with reference thereto as

appears right.

11. THIS COURT ORDERS that with respect to any claims listed on an Allowed

Claims Sheet to which no objection was received within twenty-five (25) days from the date of

the letter referred to in paragraph 3 hereof, the Liquidator may seek the approval of this Court

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with respect to such claims and no further objections may be raised by any creditors or

claimants.

12. THIS COURT ORDERS that the process set out in this Order shall not be

required for the admission of a claim to the estate which has been the subject of a final decision

of the Court.

13. THIS COURT ORDERS that any claims filed with the Liquidator after February

15, 2000 and before the date of this order shall be treated as if they were timely filed and that

distributions be made in respect of those claims in the ordinary course.

14. THIS COURT ORDERS that any claims payable in foreign currency shall be

converted to Canadian currency at the Bank of Canada noon spot rate of exchange for

exchanging such currency to Canadian currency on August 12, 1994.

G26\ 4323465.4

THE ATTORNEY GENERAL OFCANADA

Applicant


Respondent




ORDER



Tel: (416) 979-2211Fax: (416) 979-1234


G26\4323465.4

SCHEDULE “A”

LIST OF CLAIMS TO BE ADMITTED

Name of Creditor Address and Fax Number AmountClaimed

AmountAllowed

G26\4325983

“SCHEDULE B”

[LETTERHEAD OF CONFEDERATION LIFE INSURANCE COMPANY]

[Date]

To All Persons who filed Claims with the Liquidator:

Re: Confederation Life Insurance Company, in Liquidation

The Liquidator will file a Statement of Claimants and Creditors (“the Statement”) with the Officeof the Superintendent of Financial Institutions in accordance with Part III of the Winding-up Act(now the Winding-up and Restructuring Act) (the “Act”). The Statement includes those personsfrom whom the Liquidator called for claims pursuant to the Order of the Court dated October 7,1999 and who filed claims in response. Inclusion on the Statement with a nil amount indicatesthat the person’s claim has either been disallowed by the Liquidator, is still in the process ofbeing reviewed by the Liquidator or is the subject of a dispute. The Liquidator is still in theprocess of reviewing the claims filed. The Statement will be amended from time to time toreflect the results of the process described below.

The attached listing sets out the claims that the Liquidator will recommend be approved by theOntario Superior Court of Justice (the “Court”) together with the addresses of the creditors.

If your claim does not appear on the attached listing, it does not mean that your claim has been orwill be disallowed. You will hear from the Liquidator when your claim has been reviewed and adetermination of the merits of the claim has been made. The process described below will befollowed from time to time as the Liquidator is in a position to recommend further claims beadmitted. You do not need to take any further steps in the meantime.

In accordance with the Act, any creditor may object to any claim filed with the Liquidator. Theprocedure for objecting to a claim is as follows:

1. A creditor who wishes to object to a claim (an “Objecting Creditor”) must serve a writtenobjection on the creditor whose claim is being objected to (a “Subject Creditor”) includingbrief reasons for the objection, such service must be made by prepaid registered mail,facsimile or courier and received by the Subject Creditor within twenty-five (25) days ofthe date of this letter.

2. The Objecting Creditor must also serve a copy of the written objection on the Liquidator atthe address set out below, together with a copy of proof of prior service of the objection onthe Subject Creditor, such service must be made by prepaid registered mail, facsimile orcourier and received by the Liquidator within twenty-five (25) days of the date of thisletter.

3. A Subject Creditor has six (6) days after receipt of an objection to answer the objection inwriting and to serve such answer on the Objecting Creditor and the Liquidator by means of

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prepaid registered mail, facsimile or courier. If the Subject Creditor does not answer theobjection, the Court may, on the application of the Objecting Creditor, make an orderbarring the claim.

4. The Objecting Creditor has three (3) days after receipt of an answer from a Subject Creditorto reply in writing and to serve such reply on the Subject Creditor and the Liquidator bymeans of prepaid registered mail, facsimile or courier.

5. Where any time period referred to in paragraphs 1 through 4 above expires on a Saturday,Sunday or holiday in the jurisdiction in which the creditor required to effect service resides,service is to be effected on the next business day thereafter.

6. Where an objection has been raised and the parties are unable to resolve the objection, theLiquidator may seek further directions from the Court or may advise the creditors inquestion to bring a motion to have the contestation heard by the Court. If you object to aclaim and the matter is heard by the Court, you may be liable for costs. In addition,security for costs may be sought in advance of the hearing.

7. The above process will not apply to claims being adjudicated by the Court.

If there are no objections to the claims set out in the attached listing within twenty-five (25) daysof the date of this letter, the Liquidator will recommend the admission of those claims to theCourt. Once the twenty-five day period expires, no further objections may be made. TheLiquidator will seek an Order of the Court approving the admission of the claim to the estate forpurpose of receiving dividends. Admitted claims will not appear on future lists circulated by theLiquidator.

As noted above, the Liquidator is continuing to review the proofs of claim filed. The Liquidatorwill therefore circulate additional listings of claims it proposes to admit from time to time. Theprocess of objecting to those additional claims will be as described above.

The address for service on the Liquidator is as follows:

KPMG Inc., Liquidator of Confederation Life Insurance Company800 Bay Street8th FloorToronto, OntarioM5S 3A9

Facsimile No. (416) 323-2253

Attention: I. George Gutfreund

- 4 -

With a copy to:

Goodman Phillips & VinebergBarristers and SolicitorsSuite 2400250 Yonge StreetToronto, Ont.M5B 2M6

Facsimile No. (416) 979-1234

Attention: Gale Rubenstein

Please note, the fact that you have received this letter does not mean that your claim hasbeen admitted by the Liquidator.

Yours very truly,

CONFEDERATION LIFE INSURANCE COMPANY byits Liquidator, KPMG Inc.

I. George GutfreundVice-President, KPMG Inc.G26\ 4323165.7


ONTARIO SUPERIOR COURT OF JUSTICE- COMMERCIAL LIST

THE HONOURABLE MR. ) TUESDAY, THE 5TH DAYJUSTICE R.A. BLAIR ) OF SEPTEMBER, 2000




B E T W E E N:


Applicant- and -


Respondent

O R D E R




ON READING the Report of the Liquidator dated August 3, 2000 filed, and the

Report of the Liquidator dated August 26, 2000 (collectively, the “Reports”) and upon hearing

the submissions of counsel for the Liquidator, for the Canadian Life and Health Insurance

Compensation Corporation, for The Chase Manhattan Bank, for Confederation Treasury Services

Limited and James H. Grout, as representative counsel, no other party appearing.

1. THIS COURT ORDERS that the service made of the Notice of Motion and

supporting materials herein is good and sufficient notice of this motion, that this motion is

- 2 -

properly returnable today and that any further service of the Notice of Motion and supporting

materials be and the same is hereby dispensed with.

2. THIS COURT ORDERS that James H. Grout be appointed for the purposes of

reviewing the financial statements and reporting to the Court with respect to the distribution

proposed by the Liquidator and that such appointment be effective nunc pro tunc to August

18, 2000.


make an interim distribution of $260 million to be allocated between and paid to

Confederation Treasury Services Limited and the ordinary creditors of Confed, as set out in

detail in the Reports. For greater certainty, the portion to be allocated to the ordinary

creditors of Confed shall be paid pro rata to ordinary creditors as their claims are admitted to

the estate in accordance with the allowance process approved by this Court.

4. THE COURT ORDERS that the dividend sheet in the form attached hereto as

Schedule “A” be and it is hereby approved.


make distributions from time to time to the holders of allowed claims set out on the dividend

sheet.

G26\4333469

SCHEDULE "A"

IN THE MATTER OF THE LIQUIDATION OFCONFEDERATION LIFE INSURANCE CO

Dividend Sheet


0001 720 Guelph Line Holdings 78,372.76

0002 144900 Canada Inc. O/A 21,328.89

0003 Altech Investigations Inc. 1,469.65

0004 American Para Prof. Systems Inc. 1,544.28

0006 CAD Resource Centre 979.85

0007 CANAMERIC 6,966.19

0008 Careerpath Counselling 64.20

0009 Checker Cabs Ltd 141.56

0010 Davis Reberkenny & Abramowitz, P.C. 1,162.82

0012 Doxey & Associates, Dr. N.C.S. 1,350.00

0014 Gryniewski Consulting Services Inc. 294.25

0015 Hamilton, Dr. Sean 100.00

0016 Hanick, Dr. Adrian 1,675.00

0017 McKercher McKercher & Whitmore 1,459.22

0018 Pannozzo, Dr. G.J. 150.00

0019 Parlee McLaws 631.81

0020 Pinnacle Investigations Inc. 848.51

0022 Dupont Canada Inc. 9,976,528.57

0023 R.B. Ventures Ltd 100,000.00

0024 Rustad Investments Ltd 100,000.00

0025 Doraldick Investments Limited 1,761,419.94

0031 Melvin, Dr. Kenneth 250.00

0032 Abramovitch, Dr. Allan 160.50

0033 Wilde & Associates, John 3,395.25

0034 World Wide Health Services, Inc. 225.75

0044 Guy Carpenter & Co., Inc. 800,000.00

0046 Gibbons, Dr. Maureen 100.00

0050 Corporate Realty Inc. 82,133.20


0052 Adatif Investments Ltd 995,827.86

0053 John A. Kane & Waterbury 4,867.39

0101 Salit, Dr. Irving E. 400.00

0102 Leduc, Leblanc 1,620.31

0128 States of Jersey 145,846.11

0133 H&R Block Canada Inc. 4,485,932.83

0135 Chubb Security Canada Inc. 3,196,576.00

0136 Town of Pickering 997,759.63

0137 Lewis and Roca LLP 2,342.36

0138 Bureau d'Expertise Assureurs Ltee 55,000.00

0142 Wacker Drive Associates 221,786.87

0143 Advocate Investigation Serv. Ltd 2,266.48

0149 Jackson Hale Distributors Ltd 3,419.30

0150 Hooper-Holmes Canada Limited 1,613.60

0151 Kosar, Dr. Stephen E. 200.00

0156 Stewart McKelvey Stirling Scales 1,084.47

0164 Application Enabling Inc 5,007.60

0167 J. Beals Rehabilitation Consultants 1,089.00

0172 Cortlaw Services Limited 3,366.54

0174 Vexler, Dr. Ronald 320.35

0189 Canadian Imp. Bk of Commerce 7,642,824.46

0191 Abitibi-Consolidated Inc. 2,400,000.00

0209 Graphical Corp. 413.77

0238 Castek Software Factory Inc. 28,226.60

0253 ReliaStar Life Insurance Co 497,000.00

0301 Mohan, Dr. Rajesh 150.00

0316 Pope, Dr. Janet 75.00

0317 Joseph N. Gelmon 647.10

0382 The Chase Manhattan Bank 82,062,522.28

0397 Dominion Textile Inc. 3,750,000.00

0562 RBC Dominion Securities Inc 10,792,234.09

0563 UBS AG, Union Bank of 75,492,051.65


0580 Actel Resources Inc. 30,762.50

1032 Esmail, Dr. Salim 50.00

1033 Shepp Johnman & Associates 832.47

1089 Jules d'Alcantara Fleuriste Inc. 52.99

Total Creditors $205,766,921.82


Applicantand

CONFEDERATION LIFE INSURANCECOMPANY

Respondent


ONTARIO SUPERIOR COURT OF JUSTICE– COMMERCIAL LIST


ORDER



Tel: (416) 979-2211Fax: (416) 979-1234

Solicitors for KPMG Inc., the Liquidator of ConfederationLife Insurance Company

G26\4333469



THE HONOURABLE MR. ) THURSDAY, THE 7th DAYJUSTICE ROBERT A. BLAIR ) OF OCTOBER, 1999




B E T W E E N:


Applicant

- and -


Respondent

O R D E R

THIS MOTION made by KPMG Inc., the Liquidator (the “Liquidator”) of



ON READING the Report of the Liquidator dated September 30, 1999 (the “Report”),

filed, and upon hearing the submissions of counsel for the Liquidator, and Susan Rowland, the

proposed representative counsel, no other party appearing, although properly served as appears

from the proof of service, filed,

- 2 -


materials herein is good and sufficient notice of this motion, that this motion is properly

returnable today and that any further service of the Notice of Motion and supporting materials be

and the same is hereby dispensed with.

2. THIS COURT ORDERS AND DIRECTS that the Liquidator send by ordinary mail on

or before October 20, 1999, a proof of claim and instruction sheet in substantially the form

attached hereto as Schedule “A” (the “Proof of Claim”) to all persons, wherever located, with

debt or other claims against Confed in existence on August 12, 1994, whether certain or

contingent, liquidated or unliquidated (the “Ordinary Creditors”), provided that such claims are

not claims under policies of insurance and are not subordinated by their terms to all other

indebtedness of Confed, at their last known address as set out in the books and records of

Confed.

3. THIS COURT ORDERS AND DIRECTS that the Liquidator publish a notice in

substantially the form attached hereto as Schedule “B” on one occasion between the dates of

October 13, 1999 and October 22, 1999 inclusive, in each of the newspapers and languages set

out in the attached Schedule “C”.

4. THIS COURT ORDERS AND DIRECTS that the Liquidator send by ordinary mail or

by telecopier a Proof of Claim to any person making a request, at the address or telecopier

number provided by the person, within four business days of the request being received.

5. THIS COURT ORDERS AND DIRECTS that, in accordance with Section 74 of the

Winding-up and Restructuring Act, December 20, 1999 be fixed as the last day on or before

which Ordinary Creditors and policyholders who held Confed policies on August 12, 1994, other

than policyholders whose policies were issued by the United Kingdom, Cuban or United States

branches of Confed, who assert that the claims under their policies have not been fully satisfied

- 3 -

or recognized through the assumption of their policies by another insurer or payments made by,

or in the process of being made by, the Liquidator must file their Proofs of Claim with the

Liquidator.

6. THIS COURT ORDERS that Susan Rowland be appointed as representative counsel

(the “Representative Counsel”) to represent the interests of Confed’s retired employees, their

spouses and dependent children who were entitled to medical benefits, dental benefits and life

insurance as of August 12, 1994 for the purposes of preparing and proving their claims in respect

of such benefits.

7. THIS COURT ORDERS that the Representative Counsel be and is hereby authorized to

retain actuarial advice.

8. THIS COURT ORDERS that the remuneration, costs and expenses of the

Representative Counsel be treated as part of the costs and expenses of the liquidation of Confed

and that the Representative Counsel may be required, from time to time, to have her accounts

assessed on a solicitor and client basis by the Court.

G26\4281665

THE ATTORNEY GENERAL OFCANADA

Applicant


Respondent




ORDER


Gale Rubenstein\LSUC # 17088EGraham Smith \LSUC #26377D

Tel: (416) 979-2211Fax: (416) 979-1234


G26\4281665



THE HONOURABLE MR. ) TUESDAY, THE 26TH DAYJUSTICE R.A. BLAIR ) OF SEPTEMBER, 2000




B E T W E E N:


Applicant

- and -


Respondent

ORDER


Confederation Life Insurance Company (“Confed”), was heard this day at 393 University Avenue,

Toronto, Ontario.

ON READING the Report of the Liquidator dated September 21, 2000 filed, and

upon hearing the submissions of counsel for the Liquidator, for Susan Rowland, as representative

counsel (the “Representative Counsel’) and for The Chase Manhattan Bank, no other party

appearing,

- 2 -


materials herein is good and sufficient notice of this motion, that this motion is properly returnable

today and that any further service of the Notice of Motion and supporting materials be and the

same is hereby dispensed with.

2. THIS COURT ORDERS that the process for admission and disallowance of claims

approved by orders of this Court dated May 5, 2000 and June 20, 2000 (the “Allowance Process”)

be and the same is hereby modified with respect to the claims of the retired employees of Confed’s

Canadian Operations (the “Canadian Operations Retirees”) as follows:

(a) the Representative Counsel be and she is hereby authorized to mail a letter in

substantially the form attached hereto as Schedule “A” to each Canadian

Operations Retiree setting out the amount of his or her claim;

(b) any Canadian Operations Retiree who wishes to object to the amount of his or her

claim shall serve a written objection on the Representative Counsel, such service to

be effected by means of prepaid ordinary mail, facsimile or courier, within

twenty-one (21) days of the date of the letter referred to in paragraph 2(a) hereof;

(c) the list of claims circulated to creditors and the dividend sheet provided for in the

Allowance Process shall not name individual retirees, but shall set out the total

quantum of Agreed Claims of Canadian Operations Retirees under the creditor

name, “Susan Rowland, on behalf of Canadian Operations Retirees, for their retiree

benefits” (the “Canadian Operations Retirees’ Claim”); and

- 3 -

(d) Creditors objecting to the Canadian Operations Retirees' Claim will serve their

objections on the Representative Counsel rather than on individual Canadian

Operations Retirees.

G26\4342033.2

SCHEDULE “A”

Via Mail

Dear Confed Retiree:

Re: Filing of Claims on Behalf of Retirees ofConfederation Life Insurance Company, inLiquidation

As you know, I was appointed by Order of the Ontario Superior Court of Justice as the representativecounsel to Confed’s retired employees, spouses and dependent children who are entitled to medicalbenefits, dental benefits and life insurance from Confed as of August 12, 1994 (“health benefitsclaim”). I filed a Proof of Claim with the Liquidator of Confed on your behalf in time to meet theFebruary 15, 2000 deadline in the court Order. This claim is known as an “omnibus” proof of claim.

Shortly thereafter, the Liquidator applied to the Canada Customs and Revenue Agency (formerly,Revenue Canada; the “CCRA”) to obtain an advance income tax ruling to deal with the income taxtreatment of your claim.

We are pleased to report that the tax ruling was favourable, with the result that you do not have to payCanadian income tax on any money you receive this year on account of your omnibus claim amount.You do not even have to report this money on your income tax return when you fill it out next springunless you are resident in Quebec. If you are resident in Quebec, you may have to pay Quebecincome tax. I will be in touch with you further. You may have to consult your own tax advisor. Youmay also have to pay tax if you are no longer resident in Canada. You should consult your own taxadvisor to find out what tax laws of your new residency apply to this payment.

We are enclosing a copy of your individual claim statement, which was calculated by the actuaries weretained on your behalf, Eckler Partners Limited. The Liquidator has agreed to allow your claim inthis amount. If you filed your own health benefits claim and it was higher than the omnibus amount,then the Liquidator will disallow any amounts in excess of the amount we claimed for you.

You should review the enclosed claim statement, and if you disagree with it in any way, you mustnotify me by letter no later than •. You must provide me with your reasons for objecting so that I cantake up your case with the Liquidator. If I do not hear from you by that date, I will assume that your

are in agreement with the statement and will take no further action on your behalf.

Unless you wish to make such an objection, you do not need to do anything at this time. Yourrights have been protected.

If you have a change of address, please contact Marlyse Kis of KPMG in writing by sending a fax to(416) 323-2253.

If you have any questions relating to this letter, please call Pierrette Harvey of Koskie Minsky at(416) 977-9925 ext. 280 or visit our website at www.koskieminsky.com for updates.

Yours truly,

KOSKIE MINSKY

Susan Rowland

SR/sbEncls.

INDIVIDUAL CLAIM STATEMENTIN RESPECT OF

RETIREE HEALTH, DENTAL AND LIFE INSURANCE BENEFITSFROM

THE CONFEDERATION LIFE INSURANCE COMPANY, IN LIQUIDATION

«Name»«Street»«City»«Province»«Postal_Code»

NAME: «Name»SIN: «DOB»DATE OF BIRTH: «DOB»SPOUSE’S NAME: «Spouse»SPOUSE’S DATE OF BIRTH: «SP_DOB»

ESTIMATED VALUE OF HEALTH AND DENTAL BENEFITS: «CV»

ESTIMATED VALUE OF LIFE INSURANCE BENEFITS: «CV_for_share»

TOTAL CLAIM: «est_surplus»

EXPLANATION:

The estimated value of your retiree health, dental and life insurance benefits has been calculated asof August 12, 1994 (being the commencement of the liquidation) taking into account benefits paidto August 31, 1995 using generally accepted actuarial methods and assumptions. The calculationswere prepared by Jill Flicht, F.C.I.A. of Eckler Partners, the actuarial firm retained by SusanRowland of Koskie Minsky, your Representative Counsel.

If you accept the total claim amount shown above, you need do nothing further. If you object to the totalclaim, please follow the process outlined by Ms. Rowland. You have until • to make your objections to her.More details regarding Us process can be found in the attached letter.

THE ATTORNEY GENERAL OF and CONFEDERATION LIFE INSURANCE Commercial List Court File No: 97-BK-000543CANADA COMPANY

Applicant Respondent

ONTARIO SUPERIOR COURT OFJUSTICE

- COMMERCIAL LIST


ORDER

GOODMAN PHILLIPS & VINEBERGBarristers & Solicitors250 Yonge Street Suite 2400, Box 24Toronto, OntarioM5B 2M6


Tel: (416) 979-2211Fax: (416) 979-1234


G26\4342033

Commercial Court File No. 97-BK-000543

ONTARIO SUPERIOR COURT OF JUSTICE



AND IN THE MATTER OF THEWINDING-UP ACT, R.S.C. 1985, C.W-1 1, AS AMENDED

BETWEEN:


Applicant

– and –


Respondent

AFFIDAVIIT OF SERVICE

I, Susan Ballantyne, of the City of Toronto, in the Municipality of Metropolitan Toronto,MAKE OATH AND SAY AS FOLLOWS:

1. I sent by regular mail the attached letter to 653 retired employees of Confederation Life’sCanadian Operations which enclosed their individual claim statement, as prepared by EcklerPartners, Limited, in compliance with the Order of the Honourable Mr. Justice R.A. Blair madeSeptember 26, 2000;

2. The letters with enclosures were sent by regular mail on October 3, 2000 to all those who liveoutside of Quebec; and

3. On October 12, 2000 1 sent by regular mail an English and French version to those who live inQuebec.

Sworn before me this 9th day of ))

November, 2000, in the city of Toronto ))

in the Municipality of Metropolitan ) Susan Ballantyne)

Toronto )

A Commissioner etc.

C

Confederation LifeInsurance Company(IN LIQUIDATION)KPMG INC. LIQUIDATOR

800 Bay StreetEighth FloorToronto, ONM5S 3A9Telephone: (416) 323-7600Facsimile: (416) 323-7610www.confederationlife.com

0001_Creditor Claim No Claim_Noc_o_nameStreetPO_BoxCityPostal_Code

November 2, 2000

Dear Sir,


The Liquidator will file a Statement of Claimants and Creditors (“the Statement”) with the Office ofthe Superintendent of Financial Institutions in accordance with Part III of the Winding-up Act (nowthe Winding-up and Restructuring Act) (the “Act”). The Statement includes those persons fromwhom the Liquidator called for claims pursuant to the Order of the Court dated October 7, 1999 andwho filed claims in response. Inclusion on the Statement with a nil amount indicates that theperson’s claim has either been disallowed by the Liquidator, is still in the process of being reviewedby the Liquidator or is the subject of a dispute. The Liquidator is still in the process of reviewing theclaims filed. The Statement will be amended from time to time to reflect the results of the processdescribed below.


If your claim does not appear on the attached listing, it does not mean that your claim has been or willbe disallowed. You will hear from the Liquidator when your claim has been reviewed and adetermination of the merits of the claim has been made. The process described below will befollowed from time to time as the Liquidator is in a position to recommend further claims beadmitted. You do not need to take any further steps in the meantime.


1. A creditor who wishes to object to a claim (an “Objecting Creditor”) must serve a writtenobjection on the creditor whose claim is being objected to (a “Subject Creditor”) includingbrief reasons for the objection. Such service must be made by prepaid registered mail,facsimile or courier and received by the Subject Creditor within twenty-five (25) days of thedate of this letter.

2. The Objecting Creditor must also serve a copy of the written objection on the Liquidator atthe address set out below, together with a copy of proof of prior service of the objection onthe Subject Creditor. Such service must be made by prepaid registered mail, facsimile orcourier and received by the Liquidator within twenty-five (25) days of the date of this letter.

3. A Subject Creditor has six (6) days after receipt of an objection to answer the objection inwriting and to serve such answer on the Objecting Creditor and the Liquidator by means ofprepaid registered mail, facsimile or courier. If the Subject Creditor does not answer the

- 2 -

objection, the Court may, on the application of the Objecting Creditor, make an order barringthe claim.



6. Where an objection has been raised and the parties are unable to resolve the objection, theLiquidator may seek further directions from the Court or may advise the creditors in questionto bring a motion to have the contestation heard by the Court. If you object to a claim and thematter is heard by the Court, you may be liable for costs. In addition, security for costs maybe sought in advance of the hearing.


If there are no objections to the claims set out on the attached listing within twenty-five (25) days ofthe date of this letter, the Liquidator will recommend the admission of those claims to the Court.Once the twenty-five (25) day period expires, no further objections may be made. The Liquidatorwill seek an Order of the Court approving the admission of the claim to the estate for purpose ofreceiving dividends. Admitted claims will not appear on future lists circulated by the Liquidator.

As noted above, the Liquidator is continuing to review the proofs of claim filed. The Liquidator willtherefore circulate additional listings of claims it proposes to admit from time to time. The process ofobjecting to those additional claims will be as described above.

Please note, the fact that you have received this letter does not mean that yourclaim has been admitted by the Liquidator. If your claim is not on the attachedlist, you do not have to take any further steps. You will hear from the Liquidatorin due course.

The address for service on the Liquidator is as follows: With a copy to:

KPMG Inc., Liquidator of Goodman Phillips & VinebergConfederation Life Insurance Company Barristers and Solicitors800 Bay Street Suite 24008th Floor 250 Yonge StreetToronto, ON M5S 3A9 Toronto, ON M5B 2M6

Facsimile No. (416) 323-2253 Facsimile No. (416) 979-1234Attention: I. George Gutfreund Attention: Gale Rubenstein

Yours truly,

CONFEDERATION LIFE INSURANCE COMPANYBy its Liquidator, KPMG Inc.

I. George GutfreundVice-President, KPMG Inc.

* Canadian Dollars unless otherwise indicated. Exchange rate U.S. $1.3816 – U.K. £ 2.1353


Claim # Name of CreditorAmount

Claimed*AmountAllowed

11 Diamond Taxicab Association (Toronto) Limited 1,175.42 1,175.4213 Gauley & Co

Attention: Christopher C. Boychuk20,432.77 20,432.77

21 Xerox Canada Ltd 496,944.97 488,766.7140 Government Newfoundland, Department of Finance, Tax Administration 985.34 985.3448 Marilyn Medhurst 11,224.85 10,204.4151 Robb Research Services Limited

Attention: Charles Robb3,472.90 3,472.90

88 Sharon Hanewich, c/o McNiven Kelly 12,434.36 12,434.3689 William MacPherson, c/o Borden Ladner Gervais 122,505.48 92,500.00100 Darlene Daly, c/o RZCD 21,500.00 21,500.00103 Adecco Canada Inc. 10,691.21 10,691.21145 Eckler Partners Ltd 52,168.00 51,828.30148 CBA QS Limited £15,000.00

Can. 32,029.5032,029.50

154 Josée Cadotte 10,656.19 9,500.00190 Health Care Corporation of St. John’s, Financial Services 1,875.00 1,875.00191 Abitibi-Consolidated Inc. Balance of claim allowed 93,393.18256 Carillion Building, Carillion Construction Limited £317,698.17

Can. 762,475.84678,381.12

284 Haines, Miller & Associates Inc. 30,092.98 30,092.98299 174068 Canada Inc. Westcliff (Place de la cité International Phase I) Inc.

and Canamall Holdings Limited50,250.00 42,500.00

306 Albert Suissa 3,600.00 1,712.00350 Marie-Claude Fleyfel 10,987.98 10,000.00397 D.K. Acquisition Partners L.P., re Dominion Textile Inc. Balance of claim allowed 239,429.08600 DSB Refurbishment Limited, in Receivership

PricewaterhouseCoopers£52,196.88

Can. 111,456.00111,456.00

1035 David Atcheson 61,002.84 61,002.841036 Roger J. Stinchcombe 190,000.00 190,000.00584 Susan Rowland, on behalf of 652 Canadian Operations Retirees 25,255,873.00 16,728,264.57

GOODMAN PHILLIPS & VINEBERG LLP • BARRISTERS & SOLICITORS

B EIJING • H ONG KONG • M ONTREAL • NEW YORK • PARIS • S INGAPORE • TORONTO • VANCOUVER

250 Y ONGE STREET

SUITE 2400

TORONTO , ONTARIO

CANADA

M5B 2M6

TEL (416) 979-2211

FAX . (416) 979-1234

www.gpv.com

DIRECT L INE: (416) 597-4149

[email protected] 10, 2000

Our File No.: 94-1219

DELIVERED VIA FACSIMILE

To: The Service List

Dear Sirs/Mesdames:

Re: Confederation Life Insurance Company, in Liquidation (“Confed”)

Pursuant to the Orders of the Ontario Superior Court of Justice (the “Court”) dated May 5, 2000and June 20, 2000 with respect to the process for disallowing and admitting ordinary creditorclaims to the estate of Confed (the “Allowance Process’), the Liquidator was authorized tocirculate a list, from time to time, setting out the claims which it has determined ought to beadmitted (the “Allowed Claims”). The Liquidator was also authorized to file a dividend sheetsetting out details of the Allowed Claims for approval by the Court from time to time. By Orderdated September 26, 2000 the Court approved the modification of the Allowance Process withrespect to the claims of the retirees of Confed’s Canadian operations (the “Canadian OperationsRetirees”).

We are attaching a copy of a letter and list of Allowed Claims which was circulated by theLiquidator on. November 2, 2000 (the “Allowed Claims List”) to each creditor who has a claim.This list includes the claim of the Canadian Operations Retirees in the amount of $16,728,264.57.

We have now obtained November 29, 2000 as the date for a motion to be heard by the Court forapproval of a dividend sheet containing the claims on the attached Allowed Claims List (the“Dividend Sheet”) and authorizing the Liquidator to make distributions from time to time to thecreditors set out on the Dividend Sheet. The Liquidator has received no objections to the claims onthe attached Allowed Claims List as of this date. The period for objection expires on November27, 2000.

We wish to alert you to the upcoming motion to be heard on November 29,2000, as we will bebringing the motion on short service. This is necessary if the creditors are to receive their dividendpayments before Christmas.

Page 2

If you have any questions, please feel free to call me.

Yours very truly,

GOODMAN PHELLIPS & VINEBERG LLP

Gale Rubenstein

GR/rb

Encl.

G26\PAQUETTF\4351805.2

C

Confederation LifeInsurance Company(IN LIQUIDATION)KPMG INC. LIQUIDATOR

800 Bay StreetEighth FloorToronto, ONM5S 3A9Telephone: (416) 323-7600Facsimile: (416) 323-7610www.confederationlife.com

0001_Creditor Claim No Claim_Noc_o_nameStreetPO_BoxCityPostal_Code

November 2, 2000

Dear Sir,


The Liquidator will file a Statement of Claimants and Creditors (“the Statement”) with the Office ofthe Superintendent of Financial Institutions in accordance with Part III of the Winding-up Act (nowthe Winding-up and Restructuring Act) (the “Act”). The Statement includes those persons fromwhom the Liquidator called for claims pursuant to the Order of the Court dated October 7, 1999 andwho filed claims in response. Inclusion on the Statement with a nil amount indicates that theperson’s claim has either been disallowed by the Liquidator, is still in the process of being reviewedby the Liquidator or is the subject of a dispute. The Liquidator is still in the process of reviewing theclaims filed. The Statement will be amended from time to time to reflect the results of the processdescribed below.


If your claim does not appear on the attached listing, it does not mean that your claim has been or willbe disallowed. You will hear from the Liquidator when your claim has been reviewed and adetermination of the merits of the claim has been made. The process described below will befollowed from time to time as the Liquidator is in a position to recommend further claims beadmitted. You do not need to take any further steps in the meantime.


1. A creditor who wishes to object to a claim (an “Objecting Creditor”) must serve a writtenobjection on the creditor whose claim is being objected to (a “Subject Creditor”) includingbrief reasons for the objection. Such service must be made by prepaid registered mail,facsimile or courier and received by the Subject Creditor within twenty-five (25) days of thedate of this letter.

2. The Objecting Creditor must also serve a copy of the written objection on the Liquidator atthe address set out below, together with a copy of proof of prior service of the objection onthe Subject Creditor. Such service must be made by prepaid registered mail, facsimile orcourier and received by the Liquidator within twenty-five (25) days of the date of this letter.

3. A Subject Creditor has six (6) days after receipt of an objection to answer the objection inwriting and to serve such answer on the Objecting Creditor and the Liquidator by means ofprepaid registered mail, facsimile or courier. If the Subject Creditor does not answer the

- 2 -

objection, the Court may, on the application of the Objecting Creditor, make an order barringthe claim.



6. Where an objection has been raised and the parties are unable to resolve the objection, theLiquidator may seek further directions from the Court or may advise the creditors in questionto bring a motion to have the contestation heard by the Court. If you object to a claim and thematter is heard by the Court, you may be liable for costs. In addition, security for costs maybe sought in advance of the hearing.


If there are no objections to the claims set out on the attached listing within twenty-five (25) days ofthe date of this letter, the Liquidator will recommend the admission of those claims to the Court.Once the twenty-five (25) day period expires, no further objections may be made. The Liquidatorwill seek an Order of the Court approving the admission of the claim to the estate for purpose ofreceiving dividends. Admitted claims will not appear on future lists circulated by the Liquidator.

As noted above, the Liquidator is continuing to review the proofs of claim filed. The Liquidator willtherefore circulate additional listings of claims it proposes to admit from time to time. The process ofobjecting to those additional claims will be as described above.

Please note, the fact that you have received this letter does not mean that yourclaim has been admitted by the Liquidator. If your claim is not on the attachedlist, you do not have to take any further steps. You will hear from the Liquidatorin due course.

The address for service on the Liquidator is as follows: With a copy to:

KPMG Inc., Liquidator of Goodman Phillips & VinebergConfederation Life Insurance Company Barristers and Solicitors800 Bay Street Suite 24008th Floor 250 Yonge StreetToronto, ON M5S 3A9 Toronto, ON M5B 2M6

Facsimile No. (416) 323-2253 Facsimile No. (416) 979-1234Attention: I. George Gutfreund Attention: Gale Rubenstein

Yours truly,

CONFEDERATION LIFE INSURANCE COMPANYBy its Liquidator, KPMG Inc.

I. George GutfreundVice-President, KPMG Inc.

* Canadian Dollars unless otherwise indicated. Exchange rate U.S. $1.3816 – U.K. £ 2.1353


Claim # Name of CreditorAmount

Claimed*AmountAllowed

11 Diamond Taxicab Association (Toronto) Limited 1,175.42 1,175.4213 Gauley & Co

Attention: Christopher C. Boychuk20,432.77 20,432.77

21 Xerox Canada Ltd 496,944.97 488,766.7140 Government Newfoundland, Department of Finance, Tax Administration 985.34 985.3448 Marilyn Medhurst 11,224.85 10,204.4151 Robb Research Services Limited

Attention: Charles Robb3,472.90 3,472.90

88 Sharon Hanewich, c/o McNiven Kelly 12,434.36 12,434.3689 William MacPherson, c/o Borden Ladner Gervais 122,505.48 92,500.00100 Darlene Daly, c/o RZCD 21,500.00 21,500.00103 Adecco Canada Inc. 10,691.21 10,691.21145 Eckler Partners Ltd 52,168.00 51,828.30148 CBA QS Limited £15,000.00

Can. 32,029.5032,029.50

154 Josée Cadotte 10,656.19 9,500.00190 Health Care Corporation of St. John’s, Financial Services 1,875.00 1,875.00191 Abitibi-Consolidated Inc. Balance of claim allowed 93,393.18256 Carillion Building, Carillion Construction Limited £317,698.17

Can. 762,475.84678,381.12

284 Haines, Miller & Associates Inc. 30,092.98 30,092.98299 174068 Canada Inc. Westcliff (Place de la cité International Phase I) Inc.

and Canamall Holdings Limited50,250.00 42,500.00

306 Albert Suissa 3,600.00 1,712.00350 Marie-Claude Fleyfel 10,987.98 10,000.00397 D.K. Acquisition Partners L.P., re Dominion Textile Inc. Balance of claim allowed 239,429.08600 DSB Refurbishment Limited, in Receivership

PricewaterhouseCoopers£52,196.88

Can. 111,456.00111,456.00

1035 David Atcheson 61,002.84 61,002.841036 Roger J. Stinchcombe 190,000.00 190,000.00584 Susan Rowland, on behalf of 652 Canadian Operations Retirees 25,255,873.00 16,728,264.57

Documents

REPORT OF KPMG INC., THE LIQUIDATOR OF CONFEDERATION LIFE ...€¦ · REPORT OF KPMG INC., ... of Confederation Life Insurance Company ... before the liquidation but had not been