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Notes for Guidance - Protected Trust Deeds - Bankruptcy (Scotland) Act 2016

This guidance describes the general functions of Accountant in Bankruptcy and trustees in relation to their responsibilities regarding protected trust deeds (PTDs) which were granted on or after 30 November 2016

1.6 The EU Regulation

The EU Regulation is Council Regulation (EC) No. 1346/2000 of 29th May 2000 on insolvency proceedings. The EU Regulation is intended to counter forum shopping, i.e. to avoid incentives for the insolvent parties to transfer assets or judicial proceedings from one Member State to another, seeking to obtain a more favourable legal position.

The trustee under a PTD is required to state whether the EU Regulation applies to the trust deed. The EU Regulation will apply if the debtor’s main centre of interests is in any EU member state (other than Denmark). A copy of the EU Regulation is available on the Insolvency Service website.

If the EU Regulation applies to a PTD, information about the insolvency proceedings in another EU member state will be recorded in the Register of Insolvencies (see Annex A).

The trust deed will be main proceedings for the purposes of the EU Regulations if the debtor’s centre of main interest is in the UK and will be territorial proceedings if the debtor’s centre of main interest is in another member state, but the debtor has an establishment in the UK and the trust deed has been granted prior to the opening of any main proceedings elsewhere.

An EU member state liquidator may petition a sheriff for conversion of a PTD into bankruptcy, see section 190 of the 2016 Act.

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