Commencement of Private Trustee in Bankruptcy-Administered Bankruptcy Regime
27 October 2023 Posted in Press releases
1. From 1 November 2023, Private Trustees in Bankruptcy (“PTIBs”)1 will administer bankruptcy estates in all cases, save for those where the Official Assignee (“OA”) considers there is public interest and consents to be appointed as the trustee in bankruptcy. This applies when bankruptcy orders are made by the Singapore High Court in bankruptcy applications filed on or after 1 November 2023. The new PTIB-administered bankruptcy regime will ensure that public resources are more effectively and efficiently utilised in the administration of bankruptcy estates.
2. The PTIB-administered bankruptcy regime, along with miscellaneous amendments, was introduced by the Insolvency, Restructuring and Dissolution (Amendment) Act 2023.
PTIB-administered Bankruptcy Regime
3. Since August 2016, it has been mandatory for PTIBs to administer bankruptcy estates in cases where specific types of creditors2, such as banks, apply for bankruptcy orders. From 1 November 2023, under the new regime, this will extend to cases where debtors and all types of creditors apply for bankruptcy orders.
4. Following the amendments, a person applying to the Court for a bankruptcy order will be required to nominate a licensed insolvency practitioner to act as the trustee in bankruptcy. The applicant must obtain written consent from the licensed insolvency practitioner to administer the bankruptcy case before applying to the Court.
5. In addition, the Court hearing a bankruptcy application will not make a bankruptcy order on the application if neither a licensed insolvency practitioner nor the OA has consented to act as the trustee in bankruptcy.
6. The following amendments to provide enhanced protection for persons dealing with bankrupts in commercial transactions and continued support to the PTIB industry will also commence on 1 November 2023:
(a) Making publicly searchable, upon the payment of a prescribed search fee of $6, information that undischarged bankrupts submit to the trustees about their current employment status and employment history.
(b) Providing PTIBs with an additional means of determining their remuneration, namely by agreement of all creditors.3 This will provide PTIBs with more options to lower the operational costs in bankruptcy administration, which will benefit creditors.
7. For more information on the PTIB-administered regime and miscellaneous amendments, please visit the Insolvency Office website at https://go.gov.sg/bkcyfiling.
MINISTRY OF LAW
27 OCTOBER 2023
1. PTIBs can be: (i) a solicitor; (ii) a public accountant; or (iii) a chartered accountant, and have to hold an insolvency practitioner licence from the Ministry of Law’s Insolvency and Public Trustee's Office.↩
2. These include (i) institutional creditors (i.e. banking corporations, finance companies licensed under the Finance Companies Act 1967, holders of a capital market services licence granted under section 86 of the Securities and Futures Act 2001, or companies with annual sales turnover of >$100 million and >200 employees); (ii) subsidiaries of institutional creditors; or (iii) a corporation where two or more institutional creditors control more than half the voting power.↩
3. The creditors will be deemed to have agreed if they have not objected to the remuneration sought by the PTIB in the prescribed manner and within the prescribed time.↩
Last updated on 27 October 2023