An interesting blogger has began the Farepak Conspiracy Files.
If you are interested, you can read same at
An interesting blogger has began the Farepak Conspiracy Files.
If you are interested, you can read same at
EMBARGOED UNTIL 1.45PM – 4 DECEMBER 2012
FAREPAK DISQUALIFICATION – RECOMMENDATIONS/ AFFIRMATION OF CURRENT PRACTICE
|INSOLVENCY SERVICE – INVESTIGATION & ENFORCEMENT TEAM|
|Recommendations/affirmation of current practice||How we will take forward|
Improve the sense and understanding of ownership of the investigation and final affidavit in section 8 disqualification cases
The Service will review the process by which section 8 disqualification cases are handled to ensure that
a) ownership of the disqualification proceedings is clearly understood and assigned
b) the evidence requirements for the disqualification (as opposed to the section 447 report) are clearly understood and assigned.
c) the responsibility of each director for the conduct complained of is clearly understood and evidenced.
|2||Increase the focus on any lessening of the public interest in progressing disqualification proceeding as the case develops and as time elapses.||The Service will introduce a more structured process whereby decisions at key points (for example receipt of defences, withdrawal of allegations, decisions to proceed/discontinue etc) are recorded in a structured way which demonstrates the public interest of that decision. The time elapsed will be part of that consideration. |
|3||Strengthening assurance that witnesses are familiar with their evidence, its relevance and significance (including all exhibits) and are clear about the process and what is expected of them, especially where third parties my have prepared or assisted in preparation of affidavits and where witnesses may be unfamiliar with giving evidence.||a)Any likely issues regarding the availability of witnesses will be highlighted prior to proceedings being considered.
b) Witnesses will continue to be appropriately supported through the process with a new system of confirmation in place
c) Solicitors will continue to ensure that witnesses are familiar with their affidavits and exhibits and what is expected of them during the trial with a new system of confirmation in place.
|4||Whilst it is not the Secretary of State’s role to speculate on what actions directors might have taken, explicit consideration should be given as to how the defendant ought to have behaved. In the majority of cases the answer may be obvious but nevertheless the exercise may be of value. This may prompt rewording or a recasting of the affidavit and allegations.
|This will be added to guidance and considered during the process. It is not suggested that this be added into the affidavit itself.|
|5||Continuing with the common practice that Ministers and others are informed regularly of the progress of high profile cases||On high profile cases that have clear Ministerial/public/media interest a regular ‘for information’ light touch progress update will be provided to BIS, Ministerial offices and press office
|6||Ensure that the contingent liabilities for cases are reviewed regularly by the audit committee and management board in the Service and regularly communicated through the monthly forecasting process to BIS.
|The Service will produce a register for cases that have incurred significant cost or have the likelihood of significant adverse costs|
 The lessons learned review panel recognised that this case was conducted under S8 CDDA 1986, where there is no statutory time limit to commence proceedings; the vast majority of disqualification cases brought by the Service are under S6 CDDA which requires proceedings to be brought within two years from the date of the company’s failure.
EMBARGOED UNTIL 1.45PM – 4 DECEMBER 2012
REVIEW OF DISQUALIFICATION PROCEEDINGS TAKEN IN THE CASE OF EUROPEAN HOME RETAIL PLC AND FAREPAK FOOD AND GIFTS LIMITED (“Farepak”)
There are a number of useful lessons to be learned from the Farepak case, although there was a recognition that all disqualification involves litigation and all litigation involves risk (including examination at trial). The improvements and affirmation of current practice have been annexed to the review. These cover the following areas:-
The annex sets out how these can be taken forward.
Whilst recognising the value of the lessons learned, the review is satisfied that there is a suitable process in place for the preparation and authorising of disqualification cases in cases such as Farepak.
The process includes checks and balances, which the review considered were adequate at the time and which, independently, had already been strengthened since the decision to take disqualification proceedings in 2009. These include the fact that the decision to take proceedings is now very clearly independent of the original investigator.
The review is satisfied that the Farepak disqualification properly followed the then existing process and would in any case have been commenced under the new procedures.
There was a recognition that every trial involves risk. However, throughout the disqualification process, the prospect of success was assessed as, at the least, greater than 50%.This continued beyond the commencement of the trial. The decision to discontinue proceedings was taken at the point during the trial when the prospect of success was considered to have fallen below this level.
Legal advice (including from independent counsel) was sought throughout the Farepak litigation and has been sought as part of this review.
European Home Retail plc and Farepak Food And Gifts Limited (one of its subsidiaries) were the subject of a Companies Act section 447 investigation which started in October 2006 and concluded in May 2008. Both companies also went into administration in October 2006. Disqualification proceedings were commenced under section 8 of the Company Directors Disqualification Act in January 2011 and withdrawn in June 2012 after the trial had commenced. The Secretary of State became liable for the legal costs of the defendants. Exceptionally the Judge hearing the case made a statement on 21 June 2012 following the withdrawal of the case , in which he made serious criticisms regarding the proceedings and how they had been conducted. This led to a review being set up by the Insolvency Service looking to examine whether the Farepak disqualification case complied with established procedure , whether changes needed to be made to the way that future disqualification cases were handled and what lessons could be learned from the Farepak case. It was not a review of the investigation which preceded the disqualification proceedings, nor did it purport to encompass wider issues (such as regulation of saving clubs, the position of depositors, etc).
It is also worth recording that this case was conducted under Section 8 of the Company Directors Disqualification Act 1986, which allows for disqualification proceedings to be brought following an investigation under, as in this case, a Companies Act investigation. The vast majority of disqualification cases brought by the Service are under S6 of the CDDA. Both procedures now follow identical procedures (subject to legal distinctions) but at the time there were minor differences in process.
The review panel was set up on 11 July 2012 to provide a forum for reporting compliance (of the Farepak disqualification proceedings) with established disqualification case handling, the extent to which cross cutting changes to the approach to disqualifications are required and the lessons which may be learned from the Farepak case. The review panel was latterly chaired by Pat Boyden, an independent member of the Insolvency Service’s Steering Board and its other members were Robert Burns , the Director of Investigation & Enforcement Services in the Insolvency Service (and the first chair) , Sarah Hodgetts , BIS MF Group , Philip Drye , Head of BIS Internal Audit, Alan Evans , BIS Legal A andDavid Chapman, Regional Director for Official Receivers London & South East.
The review itself was carried out in two separate strands of work, as follows:
The first strand covered legal and other issues relevant to the conduct of director disqualification proceedings that arose from the Judge’s statement in this case. This part of the review was subdivided into the following areas:-
– the use of “hearsay” evidence in the Secretary of State’s lead affidavit as opposed to producing that evidence in the form of third party affidavits?
– the preparation and production of third party affidavits?
– the preparation of third party witnesses to give oral evidence at trial?
The second strand of the review looked at lessons learned from the conduct of the Farepak disqualification itself:-
The review has concluded that there are useful lessons to be taken from the case (some of which are covered by changes which have already been made in the way in which disqualification cases are handled by the Insolvency Service). The application of these recommendations, together with the changes already instigated should guard against a repetition of criticisms of the sort raised by the Judge in the Farepak case. These changes cover the way in which disqualification cases are handled within the Insolvency Service itself , the way in which cases are progressed in litigation and the way in which the Insolvency Service communicates with its main stakeholders on disqualification cases.
Annex – Lessons Learn and Affirmation of current practice
Martha H Thompson and Dermot Power of BDO LLP, Kings Wharf, 20-30 Kings Road, Reading, Berkshire, RG1 3EX were appointed Joint Liquidators of Farepak Food & Gifts Limited on 4 October 2007 Farepak Food & Gifts Limited Correspondence Address: Claims Management Team, PO Box 3404, Swindon, SN2 9EQ Registered Office: BDO LLP, Kings Wharf, 20-30 Kings Road, Reading, RG1 3EX Registered Number: 4740401 1 October 2012 Farepak Food & Gifts Limited – In Creditors’ Voluntary Liquidation (“Farepak”)
The Joint Liquidators of Farepak have today sent cheques to Farepak’s agents and customers. Below are some answers to questions you might have about the amount you were owed by Farepak or the cheque you have received.
What is the cheque that I have received?
The cheque is a final payment in relation to your claim in the Liquidation of Farepak.
How much have I been paid?
You have been paid approximately 35p for every £1 you were owed by Farepak.
How is the amount of the cheque made up?
The sum of money on the cheque you have been sent is made up of two parts: • A payment, known as a dividend, of approximately 14p in the £ from the Liquidation. • An ex-gratia (voluntary) payment by Lloyds Banking Group of approximately 21p in the £.
Why have I not received all of my money back?
When Farepak collapsed, there was no money in its bank account to pay back the agents and customers – known as ‘creditors’ – who had been saving money. As a result of the work done by the Liquidators, enough money has been recovered, in addition to the voluntary payment by Lloyds Banking Group, to send you this cheque.
Will I get any more money?
This payment represents all the money that is available to pay to Farepak’s creditors, which includes agents and customers. You will not receive any further payments.
How was my claim worked out?
Your claim was worked out from the forms you and your agent previously filled in and returned to the Liquidators, and from looking at the information that was in Farepak’s records at the time Farepak went into Administration.
Can an agent or customer provide new details of their claim now?
The claims have been finalised so it is not possible to provide new evidence now. If new claims are made now we will not be able to pay them.
What has happened during the Liquidation?
When Farepak collapsed, there was no money in its bank account to pay to its creditors, which includes agents and customers. As ordered by the Court and approved by Farepak’s creditors, including agents and customers, a Liquidation Committee was set up. This is a group of people who were owed money by Farepak and who represent all those who lost money as a result of the collapse of Farepak, including representatives of the agents and customers. As directed by the Liquidation Committee, we have been working throughout the course of the Administration and Liquidation to recover as much money as possible. The Liquidation Committee asked the Liquidators to do certain work, including taking legal action, to try to get money for the benefit of Farepak’s creditors, including agents and customers. This work can take a long time but is now finished. As a result of the work done by the Liquidators, enough money has been recovered to send you the dividend payment of approximately 14p in the £. In addition the Liquidators have sent out an exgratia (voluntary) payment by Lloyds Banking Group of approximately 21p in the £.
How long do I have to bank my cheque?
You will need to bank your cheque within 6 months of the date on the cheque.
I have changed name so cannot bank the cheque. What should I do?
Please send your cheque back and send us evidence of your change of name, for example a copy of a marriage certificate. These should be sent to: Claims Management Team, Farepak Food & Gifts Limited – In Liquidation, PO Box 3404, Swindon, SN2 9EQ. We can then arrange for a replacement cheque to be sent to you.
A Farepak agent/customer has died. What should I do?
In order for a new cheque to be sent to the agent’s or customer’s next of kin, please return the cheque and provide a copy of the death certificate. These should be sent to: Claims Management Team, Farepak Food & Gifts Limited – In Liquidation, PO Box 3404, Swindon, SN2 9EQ. We can then arrange for a replacement cheque to be sent to you.
I have read about a further 17.5p paid by the Farepak Response Fund in 2006, bringing the total paid to approximately 50p in the £. What is this?
Some vouchers and hampers were sent out by a charity called the Farepak Response Fund in 2006. The Joint Liquidators were not involved with this process and have no more information on it so cannot help further.
Additional Information By law, the Joint Liquidators are required to set out some additional information about the Liquidation: • The total amount distributed by the Liquidators is approximately £5.5 million. In addition, an £8 million exgratia (voluntary) payment made by Lloyds Banking Group was sent out by the Liquidators. • There are no unsettled claims and no funds have been retained other than to meet the final expenses of the Liquidation. • There will be no further dividend payment available following this first and final dividend payment. • A summary of the Liquidators’ Receipts and Payments can be viewed on the Farepak website (www.farepak.co.uk). More detailed information about the Liquidation can be viewed on the Farepak website (www.farepak.co.uk). If you have any questions about your cheque, please contact the Claims Management Team using the details below: Claims Management Team, Farepak Food & Gifts Limited – In Liquidation, PO Box 3404, Swindon, SN2 9EQ firstname.lastname@example.org
If you have a PayPal account, we are asking you to simply donate £1 to our HBOS Transcript Appeal.
So if you would like to donate:-
1. Go to www.paypal.com to log into your account.
2. Click on “Send Money”.
3. Then enter our PayPal email which is email@example.com and the amount you wish to donate.
Your donation will help Farepak victims buy the transcript of the Farepak Hearing and get to the bottom of the bank’s (HBOS) conduct. We are only asking for £1 as every £1 helps but you are more than welcome to donate more. Any amount would be greatly appreciated.
Thank you for your assistance in this appeal and if you want to read more about it, you can here http://www.unfairpak.co.uk/2012/08/17/appeal/
Unfairpak have campaigned for truth and justice for Farepak victims for almost 6 long years now.
The case against the Directors of European Home Retail and Farepak Food & Gifts Limited collapsed spectacularly earlier on this year and Mr Justice Peter Smith slated the way that HBOS had acted in the whole debacle.
There are still questions to be answered regarding the collapse of the Group and Unfairpak believe HBOS hold those answers.
Unfairpak were well aware that Park II could have rescued Christmas, not only for 116,429 savers but also for Farepak Food & Gifts Limited itself. However, HBOS, at its most senior level and having initially called it a “neat solution” then proceeded to ‘sit’ on it for 6 weeks before pulling the plug on the entire Group. Peter Cummings was quoted by Mr Justice Peter Smith as being the “ultimate arbiter”. The moment his decision was made he knowingly allowed extra subscriptions to be received when he also knew those receipts would be exclusively destined for his bank, without warning to the depositors.
This is NOT the first time HBOS have acted in this way. The people involved in this debacle must be exposed. Farepak savers were known as “Doris”, they are not the only ones to be called that by HBOS.
Back in February of this year, our National Campaign Coordinator wrote an article in the Times wherein she stated “The outcry over politicians’ expenses and bankers’ bonuses shows that society is no longer willing to sit back and let the “fat cats” get away with it any more. We are becoming a classless, less deferential society and the Farepak fight back is another example of how the voices of the “little people” will be heard. If any good can come from the debacle, this could be it. This week a loud message has been sent: no one is above the law and, though it may take time, justice will prevail.” Suzy Hall 17th February 2011.
Unfairpak were originally told that it would cost £15,000 to obtain the transcripts from the trial. The majority of Farepak savers were women on low incomes and simply could not afford this amount. We have since been informed copy transcripts will cost considerably less and probably hundred as opposed to thousands of pounds.
Accordingly, we are asking anyone who feels inclined to help us continue the fight for justice, to support us in our quest to obtain these transcripts which may help to further highlight potentially illicit activity at HBOS. We need as many people as possible to donate £1 (or more) to our PayPal www.paypal.com account firstname.lastname@example.org in order to obtain the transcripts and give us a fighting fund to investigate HBOS’s role further. We might even be able to get legal advice on how to proceed. We will keep a running account of what is received and how it is disbursed, on the Unfairpak site http://www.unfairpak.co.uk/ .
What our supporters have to say:-
“What happened with Farepak is absolutely outrageous and I’m not even sure it’s legal. But regardless of legalities, HBOS should pay back every penny to the victims”…Paul Moore, HBOS Whistleblower 17th August 2012
“HBOS’s handling of the Farepak and European Home Retail situation in September and October 2006 confirms that, two years prior to its own narrowly averted collapse, the bank had become congenitally incapable of acting honourably, morally or ethically — especially in view of the fact it continued to take in ‘deposits’ in September and October 2006, in the full knowledge that Farepak and EHR were headed for insolvency.”…Ian Fraser, Financial Journalist 17th August 2012
It is crucial to the future of UK banking that all the ‘baggage’ about HBOS is exposed, dealt with appropriately and that such behaviour is banished from the UK financial system before we become a laughing stock. Of all the HBOS scandals, this may not have been the biggest but it was certainly one of the shoddiest. One wonders if the HBOS bosses enjoyed their Christmas dinners in 2006? Even Scrooge may have found this one a step too far? Positively “ill founded and misconceived.”…Paul Turner 17th August 2012.
24 July 2012 MEDIA INFORMATION
Greater protection now available for Christmas Club customers after FSCS intervention
Christmas Prepayment Association members extend consumer protection to cover a banking failure
The Christmas Prepayment Association (CPA), the self-regulatory trade association for the Christmas savings industry, has strengthened its terms and conditions to maximise the safety of their savers’ money. The move comes after the Financial Services Compensation Scheme (FSCS) proposed a number of changes to the CPA.
Christmas Clubs are not regulated by the Financial Services Authority and so do not come under the direct remit of FSCS. However FSCS can protect the Clubs’ funds in some circumstances, including if the financial institution holding the money fails but the Christmas Club provider continues to operate. Following an approach by FSCS in January the CPA has amended its Code of Practice to ensure that customers’ payments are placed with an FSA-authorised institution and clearly identified against the relevant individual. This means that in the event of a bank failure FSCS will be able to return the money so it can be used to fulfil their order.
The enhanced protection applies to schemes run by Country Christmas Savings Ltd, Family Christmas Savings Ltd, Park Christmas Savings Ltd, Flexesaver Ltd and Variety Christmas Club Ltd. Letters have now gone out to customers informing them of the changes. Banking deposits with the Post Office Christmas Savings Club, the sixth and final CPA member, are already covered by the Irish Deposit Guarantee Scheme.
Mark Neale, Chief Executive of the FSCS, said: “Although Christmas Clubs are not covered by FSCS we saw that a number of simple steps could be taken to improve the protection available for people who save with such schemes. We approached the CPA and are delighted they have accepted our suggestions to ensure that all customer funds are kept in FSA-authorised accounts, with individual amounts clearly identified. In the event of a bank failure, the customers of CPA members can be sure their money is safe.
“Customers should be fully aware of the risks associated with every product, including Christmas Clubs, before taking one out. They can check whether FSCS protection will be available by visiting our website or asking the provider. In these tough times, consumers can have peace of mind by knowing that FSCS will be there for them if they need it.”
Derek Walpole, Chairman of the Christmas Prepayment Association, commented: “Our members’ Christmas Clubs provide a service that hundreds of thousands of people find useful and convenient. They allow hard-working families to put aside some of their money to save for presents so they can enjoy Christmas. We want to do everything we can to protect our customers and so are delighted to tighten our code of conduct to do this.”
FSCS protects consumers if banks, building societies or credit unions go bust. Since 2001, it has helped more than 4.5 million people and paid out more than £26 billion. It covers the full range of financial services.
Notes to Editors
1. About the FSCS
The Financial Services Compensation Scheme (FSCS) is theUK’s statutory compensation scheme for customers of authorised financial services firms. This means that FSCS can pay compensation if a firm is unable, or likely to be unable, to pay claims against it. FSCS is an independent body funded by a levy on authorised financial services firms. FSCS does not charge individual consumers for using its service.
Since 31 December 2011 the compensation limit for savings and deposits has been £85,000, up from the previous limit of £50,000. Pay-outs are now made on a ‘gross’ basis, ring-fencing deposits in the event that a consumer also holds loans with an institution that has gone bust. FSCS aims to pay compensation within seven days and in a maximum of twenty days if a deposit taker fails. For more information visit www.fscs.org.uk
2. About the Christmas Prepayment Association (CPA)
The CPA is a self-regulatory trade association for the Christmas savings industry which was set up after the collapse of Farepak in October 2006. It was launched in autumn 2007 and has six members – Country Christmas Savings Ltd, Family Christmas Savings Ltd, Park Christmas Savings Ltd (all three are subsidiaries of Park Group PLC), Flexesaver Ltd (also owned by Park Group), Variety Christmas Savings Club Ltd, and Post Office Christmas Savings Club. The CPA has a code of practice which is designed to give customers the “best possible service” and improve “the security of monies paid by them to members”.
3. Changes to the terms and conditions of the CPA’s members
The following changes have been made to ensure the FSCS can protect the Christmas Club customers of CPA members, excluding the Post Office, in the event of their bank failing:
Post Office banking deposits are held in a joint venture with the Bank of Ireland and so are covered by the Irish Deposit Guarantee Scheme. However its Christmas Club card is not covered by FSCS as its remit does not extend to pre-paid/e-cards.
Unfairpak wish to clear up in-factual information that is being put out into the World Wide Web.
All Agents of Farepak receive an Annual Report each year it is a shortened version of that which is sent to trade suppliers and former employees of Farepak. The Agents are asked to show their customers said Reports in order to keep the costs down. Alternatively, if customers have access to the internet, they can download these reports at www.farepak.co.uk .
If you were an Agent and are still receiving Annual Reports then your claim is registered! You only need to notify The Claims Management Team if you have changed your name or address. You need to write to Claims Management Team, Farepak Food & Gifts Limited – In Liquidation, PO Box 3404 , Swindon, SN2 9EQ with details of your new address or new name. If you have been married send a photocopy of your marriage certificate. If your are the next of kin of an Agent who has sadly died, please send a photocopy of their death certificate to the Claims Management Team.
If you were a customer of Farepak, please check with your Agent that they submitted your claim in 2006/2007. If your Agent confirms that they did and you have not changed your name or address since 2006 then you have to do nothing. If you have changed your name or address since 2006 you need to write to Claims Management Team, Farepak Food & Gifts Limited – In Liquidation, PO Box 3404 , Swindon, SN2 9EQ with details of your old address and new address. If you have gotten married you need to send a photocopy of your Marriage Certificate. If sadly, you are next of kin of a customer who has died, then you have to send a photocopy of the Death Certificate to the Claims Management Team.
Unfairpak are fully equipped to deal with all matters relating to Farepak and we can answer all questions in respect of same. The difference between Unfairpak answering questions and the Claims Management Team is the fact it saves time and money. The Claims Management Team are inundated, as are Unfairpak. However, Unfairpak works on a purely voluntary basis and by contacting us you are not adding to the costs of the liquidation.
If people are advising you to write direct or in fact email people at BDO, these people are actually causing you to incur costs in respect of the liquidation. Again, Unfairpak would stress that we have a direct line to BDO and if we cannot answer your question ourselves, we can have a response within basically an hour to your question.
Regarding the non receipt of Farepak Response Fund vouchers prior to Christmas 2006. Please DO NOT submit a claim to BDO. This is false and inaccurate information which is being given out. The issue of the non receipt of vouchers is being looked into and Unfairpak should be in a position next week to advise in respect of same. What Unfairpak would like to point out is the fact that it was vouchers that were sent out prior to Christmas 2006 NOT cash. Accordingly, please think back and ask yourself “did I receive vouchers from my Agent prior to Christmas 2006”. The vouchers were Love 2 Shop vouchers and were distributed registered delivery by Park Group Plc.
If there is anything we can do to help, please ask. As we have stated, if we cannot answer your question directly, we can have a response, during normal working hours, within an hour at the latest.
Unfairpak can advise that the cut off date for registering claims, updating names, changes of address etcetera has been extended until 7 August 2012 due to the volume of calls, emails etcetera by customers querying various points.
Please note that a PHOTOCOPY will suffice when you have to provide copy death certificate.
Same applies for a Marriage Certificate, a PHOTOCOPY will suffice.
Cheques will now begin to go out in September instead of August.
Updated 17 July 2012
Martha H Thompson and Dermot Power of BDO LLP, Kings Wharf, 20-30 Kings Road, Reading, Berkshire, RG1 3EX were appointed Joint Liquidators of Farepak on 4 October 2007.
This follows the appointment of Martha H Thompson and Shagun Dubey of BDO LLP, Kings Wharf, 20-30 Kings Road, Reading, Berkshire, RG1 3EX as Joint Administrators over the assets and business of Farepak on 13 October 2006.
Extension of Final Deadline to Submit Customer and Agent Claims
Following the announcement that the Joint Liquidators will be making dividend payments to creditors, including customers and agents, a number of people have asked for additional time so that they can make sure they have sent in their claims and have updated their personal details.
The Joint Liquidators can confirm that they will give customers and agents an additional three weeks, up to 7 August 2012, to make sure their claims and details are correct.
Because customers and agents are being allowed this extra time, this will mean that the Joint Liquidators will send out cheques during September.
Customers and agents who need to contact the Claims Management Team to submit a claim or to update their details should do so by 7 August 2012 by writing to Claims Management Team, Farepak Food & Gifts Limited – In Liquidation, PO Box 3404, Swindon, SN2 9EQ.
After 7 August 2012, the Joint Liquidators will begin the process of producing cheques and all of the money held by the Liquidators will be paid to creditors, including customers and agents, during September. This will mean that the Joint Liquidators will not be able to accept new claims from customers and agents that are sent in after 7 August 2012.
Joint Liquidators announce dividend payment
The Joint Liquidators of Farepak have announced that they will be making dividend payments to Farepak’s creditors, including customers and agents. In addition, the Joint Liquidators will at the same time distribute the £8million ex-gratia payment to customers and agents made by Lloyds Banking Group. The ex-gratia payment will be issued by the Joint Liquidators at no additional cost. The dividend payment – approved by the Liquidation Committee – marks the end of the liquidation of Farepak for creditors.
The Joint Liquidators have been working throughout the liquidation to recover as much money as possible for creditors as directed by the Liquidation Committee, which was set up by court order to represent all those who lost money as a result of the collapse of Farepak. This work has required the Joint Liquidators to investigate a number of possible claims and engage in legal proceedings with third parties. The Joint Liquidators have now finished their investigations and recovered as much money as possible for creditors and are in a position to pay a dividend.
Farepak collapsed leaving no money to pay a dividend to its creditors. The Joint Liquidators are now able to confirm that a payment will be made to customers and agents of approximately 32p in the £. This sum includes the dividend payment of approximately 13p in the £ secured by the Joint Liquidators and the £8million ex-gratia payment made by Lloyds Banking Group. The Joint Liquidators will aim to make payments to Farepak’s 114,000 creditors during September.
When added to the 17.5p in the £ given to all customers and agents by the Farepak Response Fund charity, set up by the Department for Trade and Industry in 2006, the dividend payment means that customers and agents of Farepak will have received a total of approximately 50p in the £.
Further details on dividend payments
By law, the Joint Liquidators must take certain steps during the time between the announcement of the dividend payment, and when the cheques are sent out to all creditors including customers and agents.
The Joint Liquidators have also agreed to give customers and agents an extra three weeks to allow them to provide information about their claims and to update their personal details.
Based on the time needed to complete the above, the Joint Liquidators will aim to make payments during September.
1. How much money will I get?
The work undertaken by the Joint Liquidators has increased the dividend payable to approximately 13p in the £, compared to nothing when Farepak went into administration. The Joint Liquidators will also distribute the £8m ex-gratia payment to customers and agents made by Lloyds Banking Group at the same time as the dividend payments, This will mean that customers and agents will receive a total payment of approximately 32p in the £.
This will mean that, for example:
– a customer or agent with a claim of £100 will receive approximately £32;
– a customer or agent with a claim of £500 will receive approximately £160; and
– a customer or agent with a claim of £1,000 will receive approximately £320.
The Joint Liquidators will aim to make payments to Farepak’s 114,000 creditors during September.
2. Why are payments being made by cheque, and not directly into bank accounts?
The Joint Liquidators are making the dividend payments by cheque because it is the best way of ensuring the money reaches the right person in this case.
3. Is this the final payment I will receive?
The dividend payment is the total and final payment that will be made to creditors. The dividend payment marks the end of the liquidation of Farepak for creditors, including customers and agents.
4. Why has the estimated dividend changed?
As with all administration and liquidation processes, it is not possible to calculate the exact dividend payment until all monies are recovered, the final number of creditors is known and all work is completed. For this reason, all dividend figures that have been shared by the Joint Liquidators (formerly Joint Administrators) to date have been based on projections and clearly set out as estimates.
As directed by the Liquidation Committee, which was set up by court order to represent all those who lost money as a result of the collapse of Farepak, the Joint Liquidators have been working throughout the course of the administration and liquidation to recover as much money as possible for creditors, including customers and agents. This work has required the Joint Liquidators to investigate a number of possible claims and engage in legal proceedings with third parties. The Joint Liquidators have now finished their investigations and are in a position to pay a dividend.
The work undertaken by the Joint Liquidators has increased the dividend payable to approximately 13p in the £, compared to nothing when Farepak went into administration. The Joint Liquidators will also distribute the £8million ex-gratia payment to customers and agents made by Lloyds Banking Group at the same time as the dividend payment. This means that customers and agents will receive a total payment of approximately 32p in the £.
Changes of personal details
Changes of name
Creditors who have changed their name since submitting their original claim but not notified the Claims Management Team should register their change of name by sending details of their name, their agent’s number, the amount of their claim, a copy of their marriage certificate or copies of other documentation and their signature to Claims Management Team, Farepak Food & Gifts Limited – In Liquidation, PO Box 3404, Swindon, SN2 9EQ by 7 August. The Claims Management Team is not able to deal with changes of name over the telephone or via email for security reasons. The Joint Liquidators can confirm that customers and agents do not need to send in original certificates.
Changes of address
Creditors who have changed their address since submitting their original claim but not notified the Claims Management Team should register their change of address by sending details of their name, their agent’s number, the amount of their claim, their old address, their new address and their signature to Claims Management Team, Farepak Food & Gifts Limited – In Liquidation, PO Box 3404, Swindon, SN2 9EQ by 7 August. The Claims Management Team is not able to deal with changes of address over the telephone or via email for security reasons.
Notification of customer / agent death
We are not able to deal with notifications of death over the telephone for security reasons. If you wish to notify us of the death of an agent or customer, please send a copy of the death certificate and the new address for correspondence together with the agent’s number (if known), to: Claims Management Team, Farepak Food & Gifts Limited – In Liquidation, PO Box 3404 , Swindon, SN2 9EQ. The Joint Liquidators can confirm that customers and agents do not need to send in original certificates.
Report to Creditors
Bad Behavior has blocked 330 access attempts in the last 7 days.