Thailand Law Journal 2010 Spring Issue 1 Volume 13

Regulation 8.02 of the Bankruptcy Regulations 1996 lays down the qualifications for a potential trustee. The applicant must have completed three years study in accountancy and two years study in commercial law. He/she should have experience in assisting a liquidator or trustee in the performance of his/her duties as a liquidator or trustee; and providing advice in relation to bankruptcy matters; and working in administration of receiverships, the winding up of corporations and any other similar functions. Furthermore, the applicant must be able to prove that he/she has not been convicted, within ten years before making the application, of an offence involving fraud or dishonesty; and has not been a bankrupt or a party (as debtor) to a debt agreement or Part X administration within ten years before making the application.

A registered trustee is not appointed, to act in relation to a particular estate unless he/she is nominated and then signs the approved consent form which is filed with the Official Receiver (section 156A)). Under section 158, the creditors are entitled to appoint two persons as trustees of an estate. The remuneration of a trustee is determined by a resolution of creditors at their meetings or, if they delegate the responsibility to a committee of inspection, the committee (section 162(1)). Typically, however, a registered trustee is remunerated on an hourly basis approved by creditors from available assets in the estate or from indemnities given by creditors. There is a statutory minimum fee for remuneration of $1,481 (section 304A(1)(i)). In case an Official Trustee of ITSA is a trustee, ITSA's fees are normally at least $4,500.

Performance standards for trustees include the duty to act honestly and impartially in their dealings and to disassociate themselves from documentation that is false or misleading, ensuring that only costs necessary and reasonable in administering a matter are incurred and that money received by a trustee for remuneration needs to be properly accounted for in accordance with the Bankruptcy Act. Where a breach of a performance standard is made, it is not automatic that disciplinary action will be taken. It is a basis upon which the Inspector-General or a committee could consider: the importance of a standard that has not been complied with; and the seriousness of the effect of a failure to comply with a standard as well as a trustee's performance history.

3.3 Canada⁸

A trustee in bankruptcy is a person licensed by the Superintendent of Bankruptcy to administer bankruptcies and proposals or debt agreements and manage assets held in trust Representing creditors, trustees are officers of the court. In addition, they advise debtors of their options with respect to debt problems; prepare official documentation that is both filed with the Superintendent of Bankruptcy and used to notify creditors; ensure the validity of claims; ensure that debtors are provided with mandatory counseling and access to mediation services if there is a dispute regarding any income 1hy are required to contribute; sell the debtor's assets (except those that are exempt from seizure) and hold the proceeds in trust for distribution to the creditors; and make an application for a debtor-s discharge (in the case of individual debtors).

To become a licensed trustee, a candidate must successfully complete the National Insolvency Qualification Program (NIQP).The NIQP is a three year joint education process that consists of a body of knowledge, a prescribed course of study including provisions for both Common Law and Civil Law systems, a tutorial, written examination or the National Insolvency Examination (NIE) and oral exam before a Board of Examination. Applicants who have passed the NIE are invited to take the oral exam. Other qualifications entail that a candidate is solvent, has good reputation, has experience in the insolvency field, has no prior sanction for professional misconducts related to commerce or economics, and has no criminal convictions of a commercial/economic nature. Furthermore, a trustee must pay an annual fee and have adequate professional liability insurance and either adequate employee dishonesty (also known as fidelity) insurance, a bond or other suitable financial arrangements.

To regulate trustee professional conduct, the Superintendent of Bankruptcy employs various compliance measures through trustee licensing: process and directive, supervision, investigation, conservatory measures and hearing and decision making. Possible decisions are cancellation or suspension of license, placing conditions or limitations on license, requirement for the trustee to make restitution to the estate (section 14.01 (d), (e), and (f). Bankruptcy and Insolvency Act (RIA)). A decision of the Superintendent may be reviewed and set aside by the Federal Court (section 14.02(5), BIA).

The remuneration of the trustee shall be such as is voted to the trustee by ordinary resolution at any meeting of creditors. Where the remuneration has not been fixed, a sum will not exceed seven and one-half percent of the property of the debtor after the claims of the secured creditors have been paid or satisfied. The trustee is allowed special remuneration if he/she carries on the debtor's business or in case of a proposal. On application by the trustee, a creditor, or the debtor and on notice to such parties as the court may direct, the court may make an order increasing or reducing the remuneration (section 39, BIA).

4. The possibility of transferring bankruptcy administration duties to the private sector and points of consideration

After studying the roles of the bankruptcy trustees or private bankruptcy administrators and the laws and regulations pertaining to the overseeing of the private bankruptcy trustees by the government organization in the United States of America, Commonwealth of Australia, and Canada, there are a number of issues to be discussed before deciding whether Thailand should institute a private bankruptcy administrator.

4.1 Applicable law, numbers and jurisdiction of the private bankruptcy administrator

If Thailand decides to transfer bankruptcy case administration to the private sector either partly or wholly, no existing law will have to be amended or additional provision enacted, as sections 6 and 139 of the Bankruptcy Act allow an official receiver to assign the receiver's job to any person qualified to act on his/her behalf.

There is another question as to whether we should limit the total number of private bankruptcy administrators like in the U.S. If the answer is yes. How should we best calculate such number? In the US, there is a restriction on the total number of private bankruptcy trustees according to the population in one area. Accordingly, each private trustee is only able to exercise his/her duties within his/her jurisdiction. Since the area of Thailand is not as vast as the US, there should be no limitations on the jurisdiction of the private bankruptcy administrator.