Farepak latest

PROCEEDINGS have begun in the High Court to disqualify directors of the collapsed hamper firm Farepak which caused misery for hundreds of residents in Whitby and district when it went bust just before Christmas in 2006.

The Whitby Gazette launched a hugely successful campaign in conjunction with Whitby Lions which saw all the firm’s customers in the area receive almost all the money back they had lost in time for the big day in the form of Love 2 Shop vouchers.

The government’s Insolvency Service has said it has applied to the court to disqualify all nine former directors of Farepak and its parent company but the directors including former CBI boss Sir Clive Thompson, will fight the action.

A statement from the Insolvency Service said the application to the High Court was made in the public interest on the grounds that “the conduct of each director in relation to the relevant company or companies makes him or her unfit to be a director.”

Farepak was not regulated by the Financial Services Authority and those customers who did not contact the Whitby Gazette at the time or were not eligible to claim the funds, later received only about 17.5p in the pound from a government-backed response fund set up after the company’s collapse.

Last year they heard they would receive a further 15p in the pound after Farepak’s joint liquidators, BDO Stoy Hayward, announced that an action against the directors of Farepak had been settled for £4m, with no admission of liability by the directors.