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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.

5.5 Removal of a trustee when unable to act or no longer able to continue to act

A trustee can be removed from office on the application of a commissioner(s), the debtor or a creditor if the following circumstances apply:

  • a trustee is unable to act, either in accordance with the Act or from any other cause shown, other than death
  • it is considered that the trustee’s conduct should not allow them to continue to act

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

AST must order the intimation of any application as they consider necessary.

The Accountant can also issue an order, without an application, when the Accountant is satisfied there are reasons for the trustee to be removed.

If the Accountant is satisfied it is appropriate they will:

  • declare the office vacant
  • make any necessary order to enable the bankruptcy to proceed and to safeguard the estate pending the election of a new trustee

5.5.1 Meeting of creditors

AST will advise the commissioner(s), or when there is no commissioner(s) AiB, to call a meeting of creditors within 28 days of the of the decision for the purpose of election of a new trustee.

The meeting should be held in accordance with Schedule 6, Part 1 of the Act and should follow the procedure as shown in section 18.5.

Following the meeting the commissioner(s) should upload to BASYS, or send to AiB, a copy of the following documents:

  • the letter issued to convene the meeting (to be placed in the electronic Sederunt Book)
  • the minutes, signed by the person who chaired the meeting, with the attendance sheet (to be placed 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 commissioner(s) and the Accountant 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 3.4)
  • any other person as may be determined by the Accountant and who consents to the appointment

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

5.5.2 Removal of the trustee – unable to act – review and appeal

An application can be made by the trustee, the commissioner(s), the debtor or any creditor to the Accountant’s independent review team for a review of a decision made by the Accountant to:

  • declare the office to have become, or to be vacant
  • make any necessary order under section 72(2)(b)

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 or 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.

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