Notes for Guidance - Bankruptcy (Scotland) Act 2016 (as amended)

An interim trustee is only appointed pending determination of the petition for bankruptcy and remains in office between the presentation of the petition and the award, or refusal, of the bankruptcy.

4.4.1 Functions of an interim trustee

The interim trustee’s sole function is to safeguard the debtor’s estate pending a decision on the award of bankruptcy. The role of an interim trustee can be found at section 3.1.

The interim trustee shall supply the Accountant with such information as the Accountant considers necessary to discharge their duties. See Appendix A.

4.4.2 Appointment of an interim trustee

When a petition for bankruptcy is presented a sheriff may appoint an interim trustee if:

• the debtor consents; or
• the person presenting the petition shows cause.

A sheriff may appoint a person who has been nominated to act and:

• the person is qualified to act
• has given an undertaking to act
• a copy of the undertaking has been provided

Following the appointment the interim trustee must:

• as soon as practicable notify the debtor of the appointment
• send a copy of the Form 13 - Statement Of Undertakings of The Regulations for completion and signature.

4.4.3 Removal, resignation of an interim trustee

A sheriff can remove from office an interim trustee and appoint a replacement if they are satisfied on application by the interim trustee, the debtor, a creditor or the Accountant that the interim trustee:

• is no longer able to act as interim trustee
• has failed without reasonable excuse to perform their duties
• has conducted themselves in such a way they should no longer continue to act

If the interim trustee dies, an application to appoint a new interim trustee can be made to the sheriff by:

• the debtor
• a creditor
• the Accountant

4.4.4 Termination of an interim trustee’s functions when not appointed trustee

This section applies when a sheriff either:

• awards bankruptcy but appoints a trustee other than the interim trustee
• refuses to award bankruptcy

When a sheriff awards bankruptcy but appoints another person as trustee, the interim trustee shall hand over to the new trustee everything in their possession which relates to the bankruptcy, and cease to act.

The sheriff may make a determination of who is liable for the fees and outlays of the interim trustee with determination of the amount to be decided by the Accountant.

4.4.5 Interim trustee accounts

The interim trustee is not entitled to take any remuneration until a determination has been issued by the Accountant.

This role is undertaken by the Trustee Accounts team (Accounts Team) on behalf of the Accountant.

Within three months of the sheriff appointing another trustee, the interim trustee shall submit to AiB:

• the accounts (if any) relating to the debtor’s estate
• a claim for outlays and remuneration

The trustee shall also send a copy of the accounts and the claim to:

• the debtor
• the petitioner
• if bankruptcy was awarded, to the trustee and all known creditors

The Accounts team will audit the accounts and determine the amount of the outlays and remuneration payable to the interim trustee.

The Accounts team will issue the determination to:

• the interim trustee
• the trustee

A copy will also be placed in the electronic Sederunt Book.

The interim trustee will send a copy of the determination to all other persons who received a copy of the accounts as detailed above.

All persons receiving a copy of the interim trustee’s accounts may appeal the determination to the sheriff within 14 days of the notification.

The decision of the sheriff is final.

4.4.6 Discharge of an interim trustee

This role is undertaken by the Bankruptcy Administration and Investigations (BAI) team on behalf of the Accountant.

On receipt of the determination the interim trustee may apply to The Accountant for their discharge and shall send notice of their application to the following :

• the debtor
• the petitioner
• if bankruptcy was awarded to the trustee and all creditors

The notice shall advise they may make written application to the BAI team within 14 days or discharge may be granted and the terms of discharge that will apply.

On the expiry of the 14 day period the BAI team will, if satisfied the interim trustee has completed all their duties, and after considering any representations made, grant or refuse to grant the certificate of discharge and notify the persons mentioned above.

4.4.7 Discharge of an interim trustee – review and appeal

An application can be made to the Accountant’s independent review team for a review of a decision made by the Accountant to grant, or refuse to grant, the discharge of the interim trustee.

This can be done by:

• the interim trustee
• the debtor
• the petitioner
• the trustee and all creditors known to the interim trustee (if the bankruptcy was awarded)

An application must be received before the expiry of 14 days from the date the decision was made by the Accountant.

The team must take into consideration any submissions made by the applicant and any interested person before the expiry of 21 days from the date the application.

The outcome of the review to confirm, revoke or amend the decision must be made before the expiry of 28 days from the date the application for review was made.

Any person entitled to request a review may appeal the review decision to the sheriff before the expiry of 14 days from the date the review decision, was made.

The sheriff’s decision is final.

4.4.8 Effect of granting a certificate of discharge

The granting of a certificate of discharge by the Accountant shall have the effect of discharging the interim trustee from all liability (other than any liability arising from fraud) to the debtor, to the petitioner and to the creditors in respect of any act or omission of the interim trustee in exercising their duties under the Act.

If the interim trustee does not apply for a certificate of discharge the effect of discharge will happen when the trustee is discharged (see section 14.3).