PACE Savings: KPMG says the claims process needs no representative counsel

William J. Trotter says he bought 100,000 Class B Investment Shares of PACE Savings & Credit Union Limited. The credit union's books, as its liquidator reads them, record him as holding 109,803 Class B Investment Shares and no Class A Profit Shares, which makes him one of 642 members holding shares of one class or both, per the Supplemental Report to the Sixth Report of the Liquidator, Sept. 28, 2026, para. 10. On September 24, 2026, his counsel, James A. Brown Professional Corporation, served a motion record asking that Mr. Brown's firm be appointed representative counsel for "Investor Claimants": members who, in the motion record's words, "paid consideration for securities of PACE Credit Union that were not transferred or issued in accordance with law during the period of administration from September 28, 2018 to August 24, 2022" (Supplemental Report, Sept. 28, 2026, paras. 1, 8–9).

The motion came a week before KPMG Inc., the liquidator, was due before the Commercial List on October 1 to ask for an order that would, four years into the winding-up, set a process for determining the claims of those 642 holders, whom the creditors' claims process of 2023 had left out (Sixth Report, Sept. 3, 2026, paras. 21, 38). KPMG's supplemental report and factum of September 28 oppose the appointment, say its own process already gives holders a way to dispute its records; the report attaches eleven appendices on Mr. Brown's earlier involvement in the case and on an earlier motion for representative counsel (Supplemental Report, Sept. 28, 2026, paras. 2, 36). Mr. Trotter's own motion record and affidavit are not among the case filings, so his case is known here only as the liquidator describes it.

Silence as acceptance, by December 4

PACE had been under administration since September 28, 2018, first by the Deposit Insurance Corporation of Ontario and, from June 2019, by the Financial Services Regulatory Authority of Ontario (FSRA), which as administrator applied in August 2022 to wind it up, per Justice Steele's reasons of August 15, 2024 (Supplemental Report, Sept. 28, 2026, App. H, 2024 ONSC 4489, paras. 9–11). Alterna Savings and Credit Union Limited had by then taken substantially all of the business, liabilities, member deposits and employees, in a transaction that closed on June 30, 2022. On August 24, 2022, the court ordered PACE wound up under s. 240 of the Credit Unions and Caisses Populaires Act, 2020 and appointed KPMG liquidator (Sixth Report, Sept. 3, 2026, paras. 1–2). Alterna did not take the credit union's authorized capital, which Justice Valente later described as "to be addressed as a part of the liquidation's claims process" (Sixth Report, Sept. 3, 2026, para. 35; Supplemental Report, Sept. 28, 2026, App. J, 2026 ONSC 804, para. 31).

The articles of amalgamation rank that capital in three tiers. Holders of Class B Investment Shares are paid their Redemption Amount, the amount paid up on each share plus declared and unpaid dividends, "and no more", before any distribution to Class A; the Class A Profit Shares are then paid the same way; and what remains after all debts and the redemption of all shares goes to the members equally, "irrespective of the length of time each member has been a member" (Sixth Report, Sept. 3, 2026, para. 36). The Class B Redemption Amounts total $12,324,758 and the Class A $5,634,853, for $17,959,611 in all (Sixth Report, Sept. 3, 2026, para. 37).

Nineteen creditor claims were filed by the 2023 bar date, three of them later amended upward, for a total of $51,265,041; by September 3, four had been fully allowed at $31,234,712, three partly allowed, nine disallowed at $12,388,266, and three remained unresolved, one for $638,250 and two for undetermined amounts (Sixth Report, Sept. 3, 2026, paras. 23–24). The factum puts the claims allowed, with any appeal rights expired, at approximately $34.7 million (Factum of the Liquidator, Sept. 28, 2026, para. 4). On August 28, 2026, the liquidator held $46,822,362, after professional fees of $6,081,294 since its appointment (Sixth Report, Sept. 3, 2026, para. 31 and statement of receipts and disbursements). It "expects proceeds to be available for distribution after the ultimate payment of those Claims," and so considers this "the proper time" to turn to the shareholders. It does not expect any proceeds to be available for claims on the membership shares, which the new process leaves out (Sixth Report, Sept. 3, 2026, paras. 38–39).

The process starts from the credit union's books. Each holder with an address on file gets a Statement of Negative Notice Claim. A holder who files nothing by 5 p.m. Eastern Time on December 4, 2026 has the claim deemed accepted as stated; one who disputes it, or has a claim it does not capture, files a Notice of Dispute by then, and a claimant who received no statement files a Proof of Claim. Claims not filed are "forever barred," except those deemed accepted (Sixth Report, Sept. 3, 2026, paras. 40–43). Disputes the liquidator cannot settle go to a claims officer or to the court (Sixth Report, Sept. 3, 2026, paras. 44–46). The draft order defines a Claim to include "any dispute as to the redemption amount, account type or any other information relating to" the shares (Motion Record of the Liquidator, Sept. 11, 2026, Tab 1, Sched. "A" (draft order), paras. 2(c), 2(m)). The factum cites Justice Steele's approval, in October 2025, of a negative-notice process for interest holders in the Clearview Garden Estates case (Factum of the Liquidator, Sept. 28, 2026, para. 32).

What the motion asks, in the liquidator's summary

The factum sorts Mr. Trotter's requests into three groups: the appointment of Mr. Brown's firm as representative counsel, with ancillary relief; "extensive production" from the liquidator and FSRA, including about transactions years before the liquidator's appointment; and "broader relief, including suspending the winding-up pending production and declarations concerning the validity of certain Class A and Class B share transactions" (Factum of the Liquidator, Sept. 28, 2026, para. 20). The mandate, the supplemental report says, is defined as "such steps and perform such acts as are reasonably necessary or desirable for the purposes of representing the Investor Claimants in these proceedings." The motion also asks for a committee of investors to advise counsel, for evidence of compliance with the Act for all shares sold after September 12, 2012, and for the records relating to all Class A Profit Shares sold between September 28, 2018 and August 24, 2022 (Supplemental Report, Sept. 28, 2026, para. 36(b)(i)).

Objections KPMG has made before

The liquidator's view is that representative counsel "is not appropriate in the circumstances." Its process already lets holders review its information, accept or dispute it and assert further claims, and it has their contact details, a website, an email address and a telephone line, and "has responded to numerous inquiries from those shareholders" (Supplemental Report, Sept. 28, 2026, paras. 36, 36(a)). On cost, it says the appointment "provides no benefit to the Credit Union's stakeholders, and it is not appropriate for the stakeholders to have to bear costs associated with Brown's appointment" (Supplemental Report, Sept. 28, 2026, para. 36(b)(ii)). Mr. Trotter holds only Class B shares, whose rights, it notes, differ from those of Class A holders. And on the firm's qualifications, it says that "there is no basis for the Court to conclude that Brown is qualified to be appointed as representative counsel for its proposed mandate" (Supplemental Report, Sept. 28, 2026, para. 36(c)–(d)).