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

This section applies when a trustee is acting in two or more bankruptcies and circumstances prevents the trustee from carrying out their functions, or makes it impracticable for the trustee to carry out those functions. These include:

• death of the trustee
• ceases, by virtue of section 49(4) of the Act to be qualified to continue to act as trustee
• conflict of interest affecting the trustee
• change in the personal circumstances of the trustee

5.2.1 The application process

The application must be made on a Form 1 of the Applications and Decisions Regulations .

The following information should be included in the application:

• the reason for the application
• a list of cases to be transferred (including AiB reference number)
• a list of all creditors for each case to be transferred (including addresses and reference numbers)
• the name and address of the proposed replacement trustee
• confirmation the proposed replacement trustee consents to act
• a copy of the proposed replacement trustee’s insolvency permit and bond (if not already held by AiB)

A copy of the application must be sent to every interested party for each of the cases listed on the application. The parties should be informed of their right to make representation to the Accountant within 14 days of the date of the application.

They should also be informed of any potential changes to the fee rates and outlays to be charged by the proposed replacement trustee and if there is expected to be any change to the administration of the bankruptcy.

The Accountant considers it is very important creditors are made fully aware of any impact a change of trustee may have on the administration of the bankruptcy to allow creditors to make an informed decision on whether to lodge a representation.

5.2.2 Actions of the TS team

The TS team may make any necessary enquiries of the applicant, or any person making representation. Any request will be made in writing and specify the time period under which the information, evidence or documentation must be provided.

The TS team, if satisfied there is a good reason, may require any person making an application, or making representation to:

• provide any document or information as may be reasonably required
• attend a hearing, at such time and place as may be specified for the purposes of giving evidence

The TS team may refer the matter to the sheriff by making an application for a direction in relation to that matter.

5.2.3 Actions of the Accountant

The Accountant may only appoint a person who is qualified to act and who has consented to the appointment.

However, the Accountant may determine no person is to be appointed. It is the expectation that the Accountant will first try and appoint a qualified insolvency practitioner to be the replacement trustee. However, if no insolvency practitioner wishes to take the appointment, or the Accountant deems it necessary, the Accountant in Bankruptcy will be appointed as trustee.

Upon the expiry of the representation period the Accountant will consider the application, together with representations received.

Within 14 days the TS team must:

• notify the determination or appointment to the former trustee, the debtor, the replacement trustee, each sheriff who awarded the bankruptcy or to whom the sequestration was transferred
• update the Register of Insolvencies (if appropriate)
• advise the applicant of any actions to be taken when an appointment is not made
• issue an invoice to the applicant. The fee to be applied can be found in The Fees Order 

The fee charged will cover all cases transferred under the application. It is not anticipated this cost will be an outlay of any individual case.

5.2.4 Actions of the replacement trustee

The replacement trustee must notify their appointment to every creditor known to them for each case to which they are appointed and advise of the right of review.

The replacement trustee may require from the former trustee:

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

5.2.5 Replacement trustee more than one bankruptcy- review and appeal

An application can be made by the former trustee (or if appropriate their representative), the debtor or any creditor to the Accountant’s independent review team for a review of a decision or appointment made by the Accountant.

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

The team may refer a case to the court, either to the sheriff or to the Court of Session, for a direction before undertaking a review.

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 determination 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.

Any appeal must be made by single petition to the Court of Session when the appeal relates to two or more cases, or in any other case to the sheriff.