Bankruptcy (Scotland) Act 1993

Voluntary trust deeds for creditors

32 (1) Schedule 5 (which makes provision as to voluntary trust deeds for creditors) shall be amended as follows.

(2) For paragraph 5 (which sets out the conditions for a trust deed becoming a protected trust deed) there shall be substituted the following paragraph—

“5 (1) Paragraphs 6 and 7 of this Schedule shall apply in respect of a trust deed if—

(a) the trustee is a person who would not be disqualified under section 24(2) of this Act from acting as the permanent trustee if the debtor’s estate were being sequestrated;

(b) after the trust deed has been delivered to him, the trustee publishes in the Edinburgh Gazette the notice specified in sub-paragraph (3) below;

(c) not later than one week after the date of publication of such notice, the trustee sends to every creditor known to him—

(i) a copy of the trust deed;

(ii) a copy of the notice; and

(iii) such other information as may be prescribed;

(d) within the period of 5 weeks beginning with the date of publication of such notice, the trustee has not received notification in writing from a majority in number or not less than one third in value of the creditors that they object to the trust deed and do not wish to accede to it; and

(e) immediately after the expiry of the said period of 5 weeks, the trustee sends to the Accountant in Bankruptcy for registration in the register of insolvencies a copy of the trust deed with a certificate endorsed thereon that it is a true copy and that he has not received notification as mentioned in sub-sub-paragraph (d) above.

(2) Any creditor who has been sent a copy of the notice referred to in sub-paragraph (1)(b) above and who has not notified the trustee as mentioned in sub-paragraph (1)(d) above that he objects to the trust deed shall be treated for all purposes as if he had acceded to the trust deed; and any reference in this Act to a creditor who has acceded to a trust deed shall include a reference to a creditor who is treated for all purposes as if he had so acceded.

(3) The notice mentioned in sub-paragraph (1)(b) above shall be in the prescribed form and shall contain such information as may be prescribed.

(4) The Secretary of State may by regulations amend sub-paragraphs (1) to (3) above by replacing them, varying them or adding to or deleting anything from them.

(5) Regulations made under sub-paragraph (4) above may contain such amendments of this Act as appear to the Secretary of State to be necessary in consequence of any amendment made by the regulations to the said sub-paragraphs (1) to (3).”

(3) In paragraph 6, for sub-paragraph (a) there shall be substituted the following sub-paragraph—

“(a) subject to paragraph 7 of this Schedule, a creditor who has—

(i) not been sent a copy of the notice as mentioned in paragraph 5(1)(c) above; or

(ii) notified the trustee of his objection to the trust deed as mentioned in paragraph 5(1)(d) above,

shall have no higher right to recover his debt than a creditor who has acceded to the trust deed;”.

(4) In paragraph 7, in sub-paragraph (1)—

(a) for the words “who has not acceded to the trust deed” there shall be substituted the words “who has not been sent a copy of the notice as mentioned in paragraph 5(1)(c) above or who has notified the trustee of his objection to the trust deed as mentioned in paragraph 5(1)(d) above”; and

(b) in sub-sub-paragraph (a), for the words “paragraph 5(b)” there shall be substituted the words “paragraph 5(1)(b)”.

(5) In paragraph 10, for the words “who has not acceded to the trust deed” in both places where they occur there shall be substituted the words “who has not been sent a copy of the notice as mentioned in paragraph 5(1)(c) above or who has notified the trustee of his objection to the trust deed as mentioned in paragraph 5(1)(d) above”.

(6) In paragraph 11, for the words “who has not acceded to a protected trust deed” there shall be substituted the words “who has not been sent a copy of the notice as mentioned in paragraph 5(1)(c) above or who has notified the trustee of his objection to the trust deed as mentioned in paragraph 5(1)(d) above”.