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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.

5.3 Resignation or death of the trustee

This section should be applied for the transfer of a single case.

If a trustee is unable to act in a bankruptcy they may apply to the Accountant to resign as trustee. An application to resign is to be made using Form 14 of The Regulations (see section 1.5).

5.3.1 Actions of the Accountant

The Accountant will grant an application to resign if satisfied:

  • the trustee is unable to act whether under a provision of the Act, by virtue of a provision of the Act or from any other cause
  • the trustee’s conduct has been such that the trustee should no longer continue to act

The Accountant will always require a meeting of creditors to be called for the purpose of holding an election of a replacement trustee by the resigning trustee, commissioners, or if appropriate the Accountant.

5.3.2 Actions of the resigning trustee

The trustee, or if appropriate the commissioner or the Accountant, should notify all known creditors to invite them to attend the meeting of creditors. The meeting should be held in accordance with section 18.5.

The trustee should, at this time, inform creditors if there is expected to be any change to the administration of the bankruptcy as a result of their resignation and the appointment of a replacement trustee.

This should highlight the name and address of any person seeking to be elected as the replacement trustee and any potential for changes to the fee rates and outlays to be charged by the proposed replacement trustee.

The Accountant considers it is very important that creditors are made fully aware of any impact a change of trustee may have on the administration of the bankruptcy, to allow creditors can make an informed decision on whether to attend the meeting of creditors and vote to appoint a replacement trustee.

A copy of the notification to creditors must be uploaded to BASYS, together with a list of the creditors who have been circularised. 

If the required meeting of creditors is not held, or is not held within the stated time period, the trustee will not have met the conditions for approval to resign and the Accountant will not appoint a replacement trustee.

5.3.3 Procedure following the meeting of creditors

Following the meeting the resigning trustee should upload to BASYS a copy of the following documents:

  • the minutes, signed by the person who chaired the meeting, with the attendance sheet (to be included in the electronic Sederunt Book)
  • when a new trustee has been elected a copy of their consent to act

When a replacement trustee is elected the Accountant and the resigning trustee will follow the procedure at section 5.1.

When no replacement trustee is elected the Accountant may appoint as the new trustee:

  • any person who wishes to be appointed (see section 5.3.4)
  • any other person as may be determined by the Accountant and who consents to the appointment 

When no person is to be appointed the Accountant in Bankruptcy will be deemed to be the new trustee.

5.3.4 Request for appointment as replacement trustee

A request should be completed within 14 days, beginning with the day of the meeting of creditors, by the person seeking to be appointed. 

The Accountant will make the appointment if:

  • all creditors have been appropriately notified and a copy of the circular has been received by the Accountant
  • a copy of the minutes confirming a trustee was not elected has been received
  • the person requesting appointment is eligible to be appointed as the replacement trustee
  • they are content for the person seeking appointment to be appointed as replacement

When satisfied the appointment should be made the TS team will:

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

5.3.5 Actions of the replacement trustee

The replacement trustee must notify the appointment to every known creditor and advise of the right of review.

The replacement trustee may require:

  • delivery of all documents relating to the bankruptcy and in their possession or their 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 commissioner(s), or if there are no commissioners, to the Accountant in Bankruptcy

The commissioner(s), or the Accountant in Bankruptcy, will issue a determination fixing the amount of the outlays and remuneration payable to the former trustee, or representative, in accordance with section 133 of the Act.

Further details on the determination process can be found in the Accounts Guide.

The determination can be appealed, within 14 days after being issued, by:

  • the trustee, or trustee’s representative
  • the replacement trustee
  • the debtor
  • any creditor

Any appeal should be made against:

  • a determination by the commissioner to The Accountant
  • a determination by the Accountant to the sheriff
  • a decision on an appeal by the Accountant is appealable to the sheriff and the decision of the sheriff is final

5.3.6 Resignation or death of a trustee – 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 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, determination or requirement 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.

For guidance on uploading to BASYS, please refer to the BASYS user guide - AST

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