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

This meeting is held for the purpose of providing creditors with information on the debtor’s assets and liabilities or to provide creditors with the opportunity to provide the trustee with information. A vote must also be undertaken confirming or replacing the appointed trustee and to elect commissioners.

The trustee must give notice to every creditor known to them whether or not they intend to call a statutory meeting. This notice must be issued no later than 60 days after the date on which bankruptcy was awarded. The trustee must send with this notice a copy of the Statement of Affairs and request claims.

Under section 44(3) of the Act the time to hold the meeting may be extended by the sheriff if cause is shown. The estate will not bear the cost of the application to the court unless the trustee can demonstrate the circumstances were out with their control and the sheriff orders the expenses to be paid.

A copy of the following should be uploaded to BASYS to be placed in the electronic Sederunt Book:

• the notice to creditors
• a list of creditors notified
• a certificate of posting
• any court application and subsequent order

3.4.1 Notification of no meeting to be held

If the trustee advises a meeting will not be held creditors must be told they may, within seven days of the notification, request a statutory meeting be convened.

Such a request can only be made by a creditor(s) with not less than one quarter in value of the creditors. If requested, the trustee must call the statutory meeting not later than 28 days after the issue of the original notice.

If no request is received within the relevant time scale the trustee must submit a report to the Accountant.

The report can be submitted on the Notification To AiB No Statutory Meeting Held form. It should be uploaded to BASYS to be included in the electronic Sederunt Book. 

3.4.2 Notification of Meeting To Be Held

The trustee must, not less than seven days before the meeting, notify every creditor known to them of the date, time and place of the meeting. The meeting may be held at such time and place as the trustee determines.

The creditors may ask to have the date of the meeting changed to a date not later than seven days after the end of the 28 day period, or longer, if they make a successful application to a sheriff under section 44(9) of the Act. If an order is granted a copy should be uploaded to BASYS and placed in the electronic Sederunt Book. 

3.4.3 Proceedings At The Statutory Meeting

The proceedings are as follows:

• the trustee must arrange for a record of the proceedings to be kept
• the trustee takes the chair at the start of the meeting
• for voting purposes at the meeting the trustee must accept or reject, in whole or in part, the claim of each creditor under Section 48(1) of the Act:
  • the usual requirement for acceptance of the entitlement of a creditor to vote will be production of a Statement of Claim in the prescribed Form 11 of The Regulations and prima facie evidence of the debt e.g. account or other voucher of debt in terms of Section 46(2) of the Act. However, the trustee may dispense with any requirement for a form or evidence of the debt to be provided which should be recorded in the minutes
  • it is permissible for a creditor to appoint a representative to act on their behalf at any meeting of creditors. A mandate form must be received
  • when the creditor is not a living individual the mandate form must be signed by a person with appropriate authority in order to be accepted as valid
• the trustee will invite the election by the creditors of one of their number as chairperson. If no chairperson is elected the trustee remains in the chair throughout the meeting
• the trustee must make the debtor’s Statement of Assets and Liabilities and the Statement of Affairs available for inspection under section 48(4)(a) of the Act. This gives the creditors the opportunity to draw attention to any errors, discrepancies, etc. The trustee shall answer, as best they can, any questions and consider any representations put to them by the creditors
• the trustee shall, having considered any representation made by creditors, determine whether the debtor’s assets are likely or unlikely to be sufficient to pay any dividend to creditors and determine whether it is necessary to revise any of the statements
• if the trustee decides to review the Statement of Affairs they must do so either at, or as soon as possible after, the statutory meeting and provide a copy of the revised statement to every known creditor. A copy should be uploaded to BASYS to be placed in the electronic Sederunt Book

3.4.4 Trustee vote

The chairperson should invite creditors to proceed to a vote at which they shall:

• confirm the appointment of the trustee (original trustee) or elect another person as the trustee (replacement trustee)
• elect no more than five commissioner(s) from among the creditors or their mandatories. See section 6 of these notes for further information

Under section 49(3) to (5) of the Act the following persons are not eligible for election as replacement trustee:

• the debtor
• a person not qualified to act as an insolvency practitioner
• a person who, though qualified to act as an insolvency practitioner, is not qualified to act as such in relation to the debtor, i.e. conflict of interest
• a person who holds an interest opposed to the general interest of the creditors
• a person who has not given an undertaking to act in writing
• the Accountant in Bankruptcy

Under section 49(6)and 49(7) of the Act the following persons are not entitled to vote:

• a person who acquires a debt after the date of bankruptcy, other than by succession
• any creditor who has a postponed debt

Under section 49(5) of the Act the following persons are not entitled to be elected as a commissioner:

• the debtor
• a person who holds an interest opposed to the general interest of the creditors
• an associate of the debtor
• an associate of the trustee

3.4.5 Procedure following the statutory meeting

If no creditor entitled to vote attended the meeting, or no replacement trustee is elected, the original trustee shall continue to act.

The original trustee shall report the proceedings of the meeting to the sheriff in terms of Section 49(9) of the Act, using Form 7.5, as prescribed in the Act of Sederunt (Sheriff Court Bankruptcy Rules) 2016.

The following productions must also be submitted to the court:

• a copy of the minutes of the statutory meeting signed by the person who chaired the meeting
• a copy of the trustee’s Statement of Affairs
• when the award of bankruptcy was made by the Accountant
  • a copy of the debtor application
  • a copy of the award of bankruptcy

The original trustee will also upload the following information to BASYS:

• a letter confirming the report has been made to the court
• a copy of the report (to be placed in the electronic Sederunt Book)
• a copy of the minutes of the meeting of creditors signed by the person who chaired the meeting (to be placed in the electronic Sederunt Book)
• the name, address, and if applicable the creditor represented, of any elected commissioner(s)

When a replacement trustee is elected reference should be made to section 5.1.