Security Home Mortgage Corporation failure (1996) | General financial discussion | Discussion forum

canadian.100 said

… I was thinking more specifically about the last liquidation like Security Mortgage in 1996. As there are some knowledgeable people (including you) in this blog who perhaps were into GICS then and might have known the specifics of that liquidation. I did know someone who held GICs in Security Mortgage in 1996 but they are deceased so obviously I cannot ask them for any details.
…

I looked into that previously.

Only $10,000 of the $42 million of deposits was uninsured.

According to court case Canada v. Security Home Mortgage Corp., the liquidator was able to recover enough to pay the $10,000 and other creditors, including CDIC, fully about six years later:

[5] As of June 24, 1996, CDIC paid out $42,225,812.22 to the holders of insured deposit liabilities of SHMC. CDIC’s claim for the total of its payments to the insured depositors is a proven claim in the winding-up, comprising 99.4% of the proven claims of ordinary creditors. CDIC and the other ordinary creditors were not fully repaid the amounts of their claims until March 20, 2002.