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

This guidance describes the general functions of Accountant in Bankruptcy, interim trustees, trustees and commissioners in relation to their responsibilities regarding bankruptcies which started on or after 30 November 2016.


5.1 Election of a replacement trustee

If a statutory meeting, or meeting of creditors, has been held and a replacement trustee was elected, the original trustee shall immediately:

  • complete a Form 4 of the Applications and Decisions Regulations 
  • upload a copy of the form to BASYS (to be included in the electronic Sederunt Book)
  • upload a copy of the minutes of the statutory meeting/meeting of creditors, signed by the person who chaired the meeting together with the attendance sheet (to be included in the electronic Sederunt Book)

5.1.1 Election of a replacement trustee - right of objection

The Accountant recommends the debtor and creditors are notified immediately after the election of a replacement trustee, in order to inform them of their right to object to the election of the replacement trustee.

Any objection should be made:

  • on a Form 1 of the Applications and Decisions Regulations
  • before the expiry of the period of four days beginning with the day of the statutory meeting, or meeting of creditors
  • specify the grounds on which the objection is being made

An objection to any matter connected to the election can be made to AST by:

  • the debtor
  • a creditor
  • the original trustee
  • the replacement trustee

A copy of the Form 1 must be issued to any interested party.

The Accountant also has the right to make an objection. This would be made by way of a summary application to the sheriff, under section 60(3)(b) of the Act, specifying the grounds on which the objection is taken.

It should be noted such an application is rare but may occur when the elected trustee is not qualified to act or when The Accountant knows of, or is made aware of, a conflict of interest.

5.1.2 Election of a replacement trustee - no objection received

If there are no timeous objections The Accountant must without delay declare the elected person to be the trustee in the bankruptcy.

AST will:

  • update the Register of Insolvencies
  • notify the original and replacement trustee
  • issue an invoice to the replacement trustee. The fee to be applied can be found in The Fees Order

5.1.3 Election of a replacement trustee - objection received

If there is a timeous objection made AST will write to :

  • the former trustee
  • the replacement trustee
  • the objector
  • any other interested person

to provide an opportunity to make written representation on the application within 14 days of the date of notification.

No expense in objecting under this section can be claimed from the debtor’s estate under section 60(6) of the Act.

5.1.4 Election of a replacement trustee - actions of the Accountant following objection

If the Accountant decides to reject the objection, they must without delay declare the elected person to be the trustee in the bankruptcy. AST will:

  • update the Register of Insolvencies
  • notify the former and replacement trustee
  • issue an invoice to the replacement trustee. The fee to be applied can be found in The Fees Order

To sustain the objection, they must order:

  • the former trustee to arrange a new meeting at which a new trustee vote must be held
  • the meeting should be held in accordance with section 18.5 

5.1.5 Election of a replacement trustee - actions of the replacement trustee

Once appointed the replacement trustee must notify the appointment to every creditor known to them for each case to which they are appointed.

The appointed replacement trustee may require from the former trustee:

  • delivery of all documents relating to each bankruptcy in which the former trustee was acting and in their possession or their representatives
  • delivery of a copy of the former trustee’s accounts
  • the former trustee, or their representatives, to submit the accounts for audit to the commissioners, or if there are no commissioners, to AiB for audit and determination of their outlays and remuneration in accordance with section 132 of the Act

5.1.6 Election of a replacement trustee - review

An application can be made by:

  • the former trustee
  • the replacement trustee
  • the objector
  • any interested person

to the Accountant’s independent review team for a review of a decision made by the Accountant to:

  • appoint a replacement trustee
  • reject an objection to the appointment of a replacement trustee
  • sustain an objection to the appointment of a replacement

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

No expense in objecting under this section can be claimed from the debtor’s estate under with section 61(9) of the Act.

The team must take into consideration any submissions made by 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, determination or requirement was made. The sheriff’s decision is final.

5.1.7 Election of a replacement trustee - appeal

If there is a timeous objection by the Accountant under section 60(3)(b) or an appeal of a review decision of the Accountant by:

  • the trustee
  • the objector
  • any other interested party

the sheriff shall without delay give the parties an opportunity to be heard on the application, and make a decision.

If the sheriff decides:

  • to reject an objection to the appointment of an elected person the sheriff must without delay declare the elected person to be the trustee in the bankruptcy
  • to sustain the objection to the appointment of an elected person the sheriff must order the former trustee to arrange a new meeting at which a new vote must be held. The meeting should be held in accordance with section 18.5

The sheriff’s declaration or decision will be final.

5.1.8 Discharge of the original trustee

This role is undertaken by AST on behalf of the Accountant.

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

  • the debtor
  • the replacement trustee
  • all creditors

The notice shall advise they may:

  • make written representations to AST against the discharge within 14 days
  • that the audited accounts of the original trustee (if any) are available for inspection at the original trustee’s office
  • that a copy of the audited accounts (if any) have been sent to the replacement trustee
  • the effect of the discharge

On the expiry of the 14 day period AST will, if satisfied the original 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.

5.1.9 Discharge of the original trustee – review and appeal

An application can be made by:

  • the original trustee
  • the replacement trustee
  • the debtor
  • any creditor who made representations under section 5.1.8 

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 original trustee.

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.

5.1.10 Effect of granting a certificate of discharge

The granting of a certificate of discharge by the Accountant shall have the effect of discharging the original trustee from all liability (other than any liability arising from fraud) to:

  • the debtor; and
  • the creditors

in respect of any act or omission of the original trustee in exercising their duties under the Act.

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

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