Farepak - The wider implications & the injustice

[nickd]

Farepak...






'When Christmas ended up in Court'

We take a look at the wider implications and the injustice


Both ilegal & Mylegal have been pleased to add what support we can to Louise McDaid and Debra Harvey's campaign for better regulatory control of firms like Farepak. They fearlessly set up the Farepak Victims Committee to help over 116,400 customers who had paid into the Farepak scheme. In October 2006 Farepak Food and Gifts had gone into administration leaving the consumers more than £37 Million pounds out of pocket. You can listen to a video of a campaign speech given by Louise McDaid in May of this year here. As of November last year not one single customer had received a single penny of their cash back.

Members of Parliament Jessica Morden and Katy Clark tabled a Parliamentary Early Day Motion in November 2011 to get better regulations and compensation for those who had lost out. The indications so far indicate that the victims of the Farepak scandal are only going to get back around 15p for every pound they paid over to the firm. It's important to remember that by and large Farepak victims are on low incomes and chose to save carefully for the benefit of their families to ease the financial burden which always comes at Christmas time. They had no reason to believe that a large firm such as Farepak would not live up to all of its well promoted promises.


The promises...







Turned to fairy dust & Santa never arrived..


Far from enjoying a carefully saved for festive Christmas, the turkey and tinsel has given way to a bitter legal battle in which hours upon hours of campaigning have yielded little in the way of proper answers to a whole host of probing questions. It has now become a political battle during which over 207 Farepak victims have sadly died throughout the duration of the relentless campaign - they never lived long enough to see justice because the wheels of the whole sorry process just grind far too slowly. The HMRC issued a costly high court action seeking disqualification of the Farepak directors but the trial recently collapsed as His Honour Judge Peter Smith absolved the directors of blame. On the 21st June in a statement issued by the Trial judge it was the firm's financiers - the Royal Bank of Scotland - rather than the Farepak directors who appear to have been most heavily rebuked.


Social Injustice hits cautious savers


Mylegal is primarily concerned with social injustice which is why it is quite appropriate to take up the Farepak story. We spend the vast majority of our time arguing the case for proper access to justice for people (typically benefit claimants) who the government has labeled as scroungers of the State, they unfairly tar them all as the 'feckless' and 'reckless'. The same targeted injustice continues for the victims of Farepak, many of whom worked hard and chose to save cautiously with a firm they put all their trust in. The Farepak story highlights how government appears to have unfairly waged war on the poorer classes regardless of whether they are on benefits, in or out of work and with no regard to how responsibly they may have acted. It's almost as though government sees being poor as villainous; there seems to be a pronounced lack of will on the part of government to afford the poor any protection - in Farepak there was certainly no reward for those who carefully saved.


Who's really to blame?


In this article we hope to highlight how the winners are the directors, the lawyers, the banks and the liquidators whilst the losers are the great unrepresented; those who put all their faith in Farepak and expected something which never arrived - goods which they had paid for in advance and which never found their way under the Christmas trees of those who thought they had done the right thing by paying 'up front'. For the victims it was anything but a 'fair pack'. Is it morally right that the consumer comes last?


Overly litigious court action?


Our predominant focus on Mylegal is over access to justice for those who do not have the means to pursue their own remedy in Court. Government pays out millions of pounds in overly litigious cases such as Farepak. Yet perversely Government condemns hard working social welfare practitioners like us who spend hours battling with the State at a piffling fixed fee of just £150 per case (paid to our organisations) whilst they happily allow HMRC lawyers to run up millions in legal fees. Surely we should look on these overly expensive publicly funded cases as amongst the worst form of 'legal aid' in the UK? It's about time we took a long hard look at how much of the tax - payer's cash is wasted by HMRC lawyers & treasury solicitors. The Farepak case is yet another HMRC legal action which has done little for the victims and added insult to injury as the tax paying victims pay out even more. Lloyds bank ( a derivative of RBS) has promised a £10 million pay out which they say will be paid to the victims, so far they've only paid out £2 million into the creditor's fund. Following the HMRC trial collapse they have pledged a further [url=http://www.bbc.co.uk/news/business-18743363
]£8 million following an intervention by Vince Cable[/url] who has indicated he will meet with representative of the Farepak victims this week. Only today Cable has accused the banks of 'throttling British industry' - he appears less inclined to voice his discontent at those who indulge in questionable business practice. We should be looking at precisely where the blame lay in the Farepak case and asking why this has all taken so long, not to mention question why the costs have been allowed to escalate with legal actions set destined to fail well before the lawyers even set foot in court. Couldn't all of this been prevented by clearer regulation & more of an earlier inclination to settle the victim's claims?


It's the tax payer & Farepak victims who lose out!


We cannot dismiss how it is that however much the banks reluctantly fork out will be passed straight back on to the consumer, the banks just pass the costs back to the consumer via higher charges and elevated interests rates; they never lose out. Remember who it is who bails the banks out, it's not the government - it's the tax payer. The same will apply to all the disproportionate court costs and those of the HMRC. The directors in this failed action will potentially be able to look for recovery of their costs from the HMRC because the judgment was in their favour. The question we should all be asking is over whether the Government is simply shifting the blame on to the bankers to court public popularity whilst it seems prepared to protect those in commerce at any price. Government is desperate for economic growth but should this extend to throwing away the regularity rule book just to allow business to profit; whatever happened to consumer protection?

The inescapable fact is that 116,400 diligent savers handed over £37 million in cash for goods which they never received; thus they are the hardest hit and it is they who deserve to be treated with priority when it comes to being in the queue for some much needed 'cash back'. It's all about returning what's rightfully owed to those who were duped into believing that Farepak was a credible trader. The victims also deserve proper regulation to be put in place to ensure this can never happen again. Instead government steadfastly opposes regulation; it chooses instead to conveniently join the hue and cry as it joins the public in blaming the banks. When Government failed to impose regulatory capping of how much cash could be lent by pay day loan firms like Wonga why should we even start to believe they will be any different with firms like Farepak? Indeed even with the LIBOR scandal why should we have any faith in believing they will ever impose tighter regulation of the financial sector? The fact is government likes a free market to attract investors, it is why it dislikes the idea of regulating commerce and indeed the financial sector which feeds it. What government neglects to think about is consumer confidence. The saying 'once bitten - twice shy' will spring to mind whenever a wronged consumer recalls how they've been ripped off before and won't be again. A suspicious consumer is far less likely to buy from a market place where consumer protection has taken second place to prospective economic growth. I doubt whether many budding entrepreneurs will think of hampers when thinking of how to make some cash; it has a damaging effect on investors as well.

You can't blame all of this on the banks though, after all the Farepak directors will hardly be going without this Christmas. Indeed far from facing disqualification they seem to be well and truly up and running with a number of fingers in many other business pies; let's just hope they don't crumble like the ones made of all that mince in those never to be seen hampers which failed to arrive on 116,400 victim's doorsteps.

What has yet to be worked out is how much of the Lloyds £10 million offer will actually end up in the hands of the Farepak victims, whilst it is of course good news that they appear to be going to get some return it will only be a small fraction of how much they handed over to Farepak. Why didn't the directors have a clear cut responsibility to let their customers know when they were in obvious financial difficulty? What 116,400 victims really want to know is where all of their £37 million actually went. Let us also not forget that even if the victims get back a paltry 15 pence back for every pound they saved they will still as consumers be paying for it in one way or another as tax payer's pick up the tab for bailing out the banks.

Let's be clear it's the tax - payer and the victims who lose out in all of this. Why are we bailing out finance and commerce in the hope they will bring us economic growth when we so readily damn the consumer with so little protection. Why doesn't government see how consumer confidence will plummet for as long as we allow this kind of injustice to continue?
[/size]

[nickd]

Just where did all of that £37 million pounds go?







Perhaps Sir Clive Thompson may care to tell over 100,000 Farepak victims?


In an article in the Daily Telegraph one time president of the CBI claimed he had been 'hung out to dry' by HBOS who seemingly wouldn't fund the ailing Farepak. One has to wonder why Thompson didn't bail out Farepak from other potentially lucrative revenue sources which Louise McDaid and Debra Harvey have carefully unearthed here. In the Telegraph article Thompson cast scorn on the banks and said:


"I have sat on the board of six FTSE 100 companies, but never have I seen behaviour such as this. If this is typical of the way HBOS treats small companies I am disgusted."


Is Sir Clive seriously suggesting he is merely a small businessman left damaged and bruised by the big bad banks? His business wasn't so small that he wasn't able to donate some of his spare cash to the Conservative party as reported in a Morning Star online article entitled 'Shameless deception in support of wealthy friends'. Here's an extract from the article:


"In 1987 Conservative chairman Norman Tebbit became a director of BET PLC, a company that won many hospital cleaning contracts. BET later merged into Rentokil, run by long-term Tory supporter and donor Clive Thompson. Rentokil in turn took charge of many of the health service cleaning and catering contracts."


One presumes or rather hopes that the HMRC in dropping the case against Thompson and fellow directors of Farepak will now step up a gear and attempt to regain some lost credibility by ensuring that Thompson & his fellow directors (click names for details),William Robinson, Neil Gillis, Nicholas Gilodi-Johnson, Paul Munn, Stephen Fowler, Michael Johns, as well as Stephen Hicks and Joanne Ponting have satisfactorily accounted for all the revenue they derive from what would seem to be a veritable cache of ongoing business concerns. It could go some way to paying for the huge legal & administrative costs racked up in bringing Farepak case to Court. Surely more questions need to be asked of the Farepak directors who seem to have been running a number of business activities simultaneously? Why do they not have a clearer cut responsibility to have bailed out Farepak from their own collective assets and why aren't they expected to surrender them when any element of their multiple business concerns becomes insolvent?

Isn't it time big business stopped hiding behind 'holding' companies and the protection afforded to them as individuals by limited liability? How can we really be sure that none of the £37 million wasn't side shifted from the ailing Farepak over to the director's other business concerns? Use the links to each director and see for yourself how they were involved in many other concerns as well as acting as Farepak directors.

[nickd]

The HMRC fiasco







"singularly failed to establish a case"


The HMRC has come in for its fair share of criticism over lost personal records and striking up reduced settlement deals with Vodafone which reportedly led to £7 billion pounds in tax being written off, but so far we have heard very little over the money they waste on failed civil court actions; much of which is born at the tax payer's expense. It's difficult to know precisely how much the total legal fees in the Farepak case amount to but it will be substantial. One also has to wonder about the quality of these legal actions given how the trial collapsed. The legal representatives of the former directors said that the Insolvency Service's evidence "singularly failed" to establish a case for their disqualification, with one of them saying "What it comes down to in the end is essentially the commercial judgement and decision-taking of the defendants." The lawyers for the Insolvency Service argued that the Farepak had traded at "unreasonable risk". The long and short of it is that the case was thrown out at a reported cost of £1 million for the trial and £8.2 million owing to the Farepak administrators according to an article in the Guardian dated 6th July. It's all money which has to be paid out before the Farepak victims get anything back. The administrators Swindon based BDO Stoy Hayward (appointed in October 2006) stand by the cost of winding up Farepak with payment of liquidation to date, including their fees as well as those of insurers and PR executives and justify the costs with following statement:


"The administration and liquidation of Farepak is complex and has involved an exceptionally large number of creditors, the identities of which were unknown at the outset of the administration and all fees have been approved by the liquidation committee."


It has been reported by the Telegraph that the Department for Business has taken the unusual step of short-circuiting a costs hearing by paying full costs to the Farepak directors which are thought to exceed an almighty £6m. The total costs for the case for its five-year investigation and related hearings are understood to be in the region of £20million , all of which will have to be borne by the taxpayer according to the Daily Telegraph article. Why were the HMRC lawyer's seemingly so badly prepared to fight their case in Court? The case was doomed to fail because the witnesses expressed 'no concern' over the conduct of the directors, why did they bring the case on such a flimsy footing?

[nickd]

Why is the Department of Business suddenly so keen to settle the Director's legal costs?




Vince Cable - Business Secretary



The Department for Business made the decision to pay the costs two days after the case collapsed amid accusations by the presiding judge that the evidence presented had been "unfairly slanted" against the directors and was "oppressive".


Louise McDaid and Debra Harvey have sent the administrators BDO an email asking for further information over amounts which they have been told need to be 'set aside' to deal with legal costs in pursuing so far unnamed third parties; one wonders who they might be? Surely some kind of investigation needs to be carried out into how the costs run up by BDO - the world's fifth largest financial accounting organisation have been allowed to escalate to an almighty sum of over £8 million pounds? Why does the Department for Business see it appropriate to pay the director's £6 million pound defence costs? - it's glorified legal aid funded by the tax - payer!

[nickd]

Why are the banks suddenly so eager to make amends?







Why has Santa Banker left it so late?


In a surprise development since starting this article the bank’s offer has reportedly been increased upwards to a reported £20 million which hopefully means the Farepak victims will get back around half of what they saved by August this year; it’s still a long way short and doesn’t answer that all illusive question; - where did all of £37 million pounds of the money paid over to Farepak end up?

The fact remains that there are still millions of pounds unaccounted for. Well before dawn broke on the day of austerity the Farepak victims had carefully put their money by only to find that they were handing their cash over to a firm which was in obvious financial difficulty. Surely someone needs to be held accountable within the firm? How can the directors shift all the blame onto the banks? Farepak would have been advised by its own lawyers and accountants well before going into Administration. Why weren’t warning bells going off over the fact that the victims, some still paying in to Farepak, were never going to get what they had paid for? There appears to be a distinct lack of accountability within the firm for any of its apparent failures and a reluctance on the part of the directors to accept any of the blame. Why has the Bank suddenly waded in with increased offers when they've had years to make generous gestures in the run up to the trial? You have to wonder why the banks who wouldn't lend to Farepak when they could, now seem to be all too eager to make amends by stumping us this much overdue offer of Santa cash; why does it take a muti-million pound trial to prompt them into action?

Even when Farepak finally ended up in Court, a question mark hangs over whether the trial judge had passed his sell by date...

[nickd]

You be the Judge....




His Honour Mr Peter Smith


What would you make of the Farepak Fiasco?


Yes even the Trial judge Mr Peter Smith has come in for his share of controversy over lengthy judgements and his involvement in the ' Da Vinci Code' case. The judge has been criticised for calling for honours to be given in the Da Vinci case to an admiral he referred to in a code hidden in his High Court ruling. Legal journalist Joshua Rozenberg in an article in the Guardian indicated that " judges with poor judgment should stand down". It's hardly likely to fill the Farepak victims with much confidence in the handling of the HMRC's case against the recently 'exonerated' directors. Thankfully social media allows us a free exchange of view and on that note it seems appropriate to sum up some of the issues thrown up by the Farepak case, please feel free to add your comments and have your say...



• Why is government so reluctant to impose regulation on firms like Farepak?


• Why were Farepak savers last in the queue when it came to getting their cash back?


• If the banks were to blame why didn't they accept liability much earlier?


• Why did the HMRC take out a cost multi-million court action which seemed destined to fail?


• How are the Farepak directors able to continue their business interests and retain their assets whilst 116,400 savers have had to wait six years before being promised they may get back around half of what they paid out?


• Why did the Banks have to wait for a costly trial & Vince Cable before stumping up their surprisingly escalating settlement offers?


• Who benefited from any interest payable on the the £37 million?


• Why it is that the Department of Business has now undertaken to settle the Farepack director’s legal costs?


• Why are the administrator’s costs over £8 million pounds?


• How is it that governments seem to almost endorse this kind of business practice and allow costs to the tax payer to escalate by so much?



Ironically, whilst Government seems so reluctant to improve protection to the cash starved consumer it continues to runs up millions of wasted pounds in tax payer footed expense just as it cuts back vital funding to advice agencies such as the Citizens Advice Bureau who often end up advising the injured parties on how to seek redress!


Now, please have your say!...

[nickd]

What Counsel says



Roy Martin QC


Counsel's note to Farepak Victims Committee..


First item to be discussed at todays meeting was the collapse of the Directors Court Case. Mr Roy Martin QC - Former Dean of the Faculty of Advocates has worked with the Farepak Victims Committee over the years. Mr Martin has produced a Joint Note which we handed to Mr Cable; hopefully we will get answers soon. Here's a copy of the note..

Louise McDaid & Debra Harvey

JOINT NOTE BY COUNSEL

For

Mrs Louise McDaid on behalf of the Farepak Victims Committee

Re: Collapse of Farepak Food and Gifts Limited

________________________________________________________________

1.We refer to the request by email from Mrs Louise McDaid who is the Chair of the Farepak Victims Committee.


2.As the members of the Committee are aware, on 20 June 2012, the Secretary of State for Business, Innovation and Skills discontinued his action brought in the High Court in London for disqualification of the Farepak directors. The next day, the judge, Mr Justice Peter Smith, issued a statement. He did so in order to explain why the “defendants are in my view right to be vindicated and, second, to explain to the depositors what actually happened with their monies” (paragraph 28).


3.The judge describes the case made by the Secretary of State as a challenging one because the Secretary of State did not attempt to say that liquidation was inevitable before October 2006. Nor did he say that the directors’ decision to seek a solvent solution was the wrong one (paragraph 103). Instead, he attempted to show that a solvent solution was possible but that the directors were at fault in not achieving it. However, the evidence led suggested that the directors had done what they could to achieve it: “they made genuine strenuous efforts to save the group and the depositors” (paragraph 20); “They did everything, as far as I can see, possible to save the group” (paragraph 119).


4.The judge is critical of the way in which the case was conducted. In essence, the reason he concludes that the failure of the case was inevitable is that the witnesses all said that “they had no criticisms of the defendants’ conduct in the relevant period” (paragraph 72). Their affidavits did not properly reflect their views on the directors’ conduct but had been “unfairly slanted” against the directors (paragraph 48).


5.In the latter part of his statement (paragraphs 77 to 128), Mr Justice Peter Smith analyses why the company failed. He is clearly critical of the Bank of Scotland, although he points out that legally they were entitled to do what they did (e.g. paragraphs 95, 118, 120). He suggests that further bank funding of £3 - £5 million would probably have saved the group but that the bank were not prepared to provide that funding (paragraphs 118). It would appear that a funding gap of £5 million arose initially in December 2005 when the group’s facilities were renegotiated (paragraphs 81 to 82). The judge appears to be most critical of the Bank having “in effect forced the directors” (paragraph 116) to continue trading in the period September and October 2006 when it had formed the view that insolvency was inevitable and that it had become their preferred option. During those two months, £10 million of deposits was received all of which (paragraphs 22 to 23 and 116 to 117) went to the benefit of the Bank – £4 million in reducing the group’s indebtedness and £6 million used in the other companies in the group which were sold in a pre-pack administration deal.


6.Earlier in that passage, he describes the way in which Farepak carried on business, which involved the use of the deposits to fund the other parts of their business (paragraph 79). He says that only Mr Johnson of Park was critical of that approach. The money was swept into the accounts of other group companies, reducing those companies borrowings and therefore interest charges.


7.We have been asked in the light of that statement what questions might be put to the Secretary of State. Some possible lines of enquiry are as follows:

Was the case brought against the directors on the wrong basis (paragraph 71: “This is clearly unfair to the defendants, because the wrong case is being presented against them”)?

Why was a case run on the basis that the directors were at fault when the witnesses did not support that position (paragraphs 72 and 76)?

Does the Secretary of State accept the judge’s conclusion that the directors were not to blame for the failure of the company (e.g. paragraph 125: “What is missing from the story is any justified complaint against these defendants”)?

Why was the case not better prepared? In particular, why had it not been understood before trial what the witnesses’ position was on the critical issue, the responsibility of the directors for the failure of the company?

Does the Secretary of State accept that there was fault on his part or on the part of the Department in the way in which they chose to present the case?

Were the following particular complaints against the directors considered and rejected:

(a)seeking to achieve a solvent solution and therefore trading on and continuing to take deposits in the hope that that would prove possible;

(b)not telling the bank in December 2005 that the group’s funding was £5 million short;

(c)not ring-fencing the deposits taken after April 2006, or at least the deposits taken in September and October 2006 (i.e. using the deposits to fund its businesses: paragraphs 79ff and 116)?

If these complaints were considered, can the Secretary of State explain why these points were rejected as part of the action against the directors?

Does the Secretary of State intend to call on the Bank of Scotland for a further substantial contribution to the victims fund?

Does the Secretary of State consider that he has any power to compel the Bank to make such a contribution?

Will the Secretary of State make transcripts of the evidence available (or pay for transcription)?

Will the Secretary of State release the Insolvency Service report on the directors, or the liquidators’ report to the Insolvency Service?


8.We understand that the meeting with the Secretary of State is on 12 July 2012. If the Victims Committee wishes to discuss any of these matters beforehand, we should be happy to hear from them.



Roy Martin Q.C. Christopher Wilson
Advocates’ Library
Parliament House
Edinburgh EH1 1RF
9th July 2012

[louise1mcdaid]

Press release by Katy Clark MP





'Farepak Fight for Justice Goes On'


Representatives from the Farepak Victims Committee and MPs have met with the Secretary of State for Business, Innovation and Skills, Vince Cable, to discuss the decision of The Insolvency Service to drop legal proceedings against former Farepak directors. On 20th June it was announced that efforts to disqualify seven former directors of Farepak and parent company European Home Retail (EHR) for a period of up to fifteen years had been dropped. Around 120,000 people lost money when the Farepak Christmas Savings Firm went into liquidation October 2006, the average amount lost being around £400. The meeting covered a range of topics including the urgent need for better regulation to protect consumers in the pre-payment industry.


Speaking on the subject Member of Parliament for North Ayrshire and Arran, who in April attempted to amend the Financial Services Act, to give greater protection to pre-payment customers, said:


“Over five years on from the collapse of Farepak it is disappointing to see that lessons have not been learnt. Pre-payment customers buying anything from gift vouchers to fridges or cookers still have next to no protection if a company they have paid into is forced into administration or liquidation. Many are simply unaware of the potential risk involved of making payments in advance in this way.”


“Unfortunately the Minister was unable to provide answers about why he was unwilling to support efforts in Parliament to amend the law. I am however encouraged that he has agreed that civil servants should enter into consultation with representatives from the Farepak Victims Committee on this issue. I hope they are willing to listen to their experiences and advice and take the measures necessary.”


Chair of the Farepak Victims Committee Louise McDaid said:


“We welcomed the chance to meet with the Secretary of State and discuss our campaign with him. It is completely unacceptable that the vast majority of those responsible for the Farepak collapse have simply been allowed to move on as if nothing had happened while those who lost out have yet to receive a penny of their money back.”


“While the meeting was not as productive as we would have liked we welcome the opportunity to enter into discussions with his Department on pre-payment regulation. We must now grasp this opportunity to ensure that another Farepak can never be allowed to happen again. The fight for justice goes on.”


Mylegal note


Read more about Katy Clark's proposed amendment to the Financial Services Bill. You have to wonder why Government will not support it?

[nickd]

Sir Clive Thompson







And those all too inevitable links...


Thompson, said to be one of the City's 'most divisive figures' was labelled 'shameless' in an article which appeared in 'This is money'; it makes you wonder how influential he has been in his links with those in power. Louise McDaid and Debra Harvey's detective work highlights Thompson past and present links here; from which it can be seen that he is an active member of Strategic Equity Capital Where it tells us:


“Sir Clive Thompson served as chairman of Rentokil Initial plc between 2002 and 2004, having been chief executive for 20 years to 2002. He is a former president of the CBI, member of the Committee on Corporate Governance and deputy chairman of the Financial Reporting Council. He is also a former Director of J Sainsbury plc, Wellcome PLC, Seeboard plc, Caradon PLC and BAT Industries plc.”


Which in turn brings us to a link to the Financial Reporting Council; their home page goes on to tell us what they are all about:


The Financial Reporting Council





Our Work...



“The FRC exercises its regulatory responsibilities in a proportionate and evidence-based way, informed by the expertise of market participants - company directors, accountants, actuaries and investors. As the UK's independent regulator it focuses on promoting high levels of audit quality and contributes to the international debate on the future of the audit market. It promotes high quality corporate reporting and governance, publishing Codes and Standards that companies, auditors, actuaries and accountants adopt. The goal of the FRC's work is to foster a climate in which investment can flourish.”


You can read more about the Financial Reporting Council here and here. Vince Cable will be only too well aware of how important a role the FRC plays in the regulation of business. In Parliament on the 28th June this year Cable was giving evidence to a Business, Innovation & Skills Committee in to Executive Pay; discussing amongst other subjects the recently shamed Bob Diamond of Barclays and the enquiry in to the Libor Scandal. Here's an extract from Cable's evidence:


Vince Cable: "I do not think what has happened in Barclays today really changes in any way our judgments about the way top pay should be governed. There are mechanisms in the system to prevent abuse. You quite correctly said that the intention is that the forward-looking pay policy would be determined on a three-year basis unless the company decided to change it, in which case it would be annual. In addition to that, however, there is the existing advisory vote. If that were based on unsatisfactory practice in the previous year, we expect that the Financial Reporting Council will require the issue of a statement by the company-we cannot dictate to them, but that is the hope and expectation-and in addition the company will be required by law to have a binding vote the following year. So there is a feedback mechanism which is more short term.”


You can read the full text on Hansard. Isn't it just incredible how the anti-regulation Thompson transpires to have been a one time deputy chairman of the Financial Reporting Council? He gave up the post back in 2001 and according to this article in the Telegraph was superseded by Iain David Thomas Vallance, now Baron Vallance of Tummel, who is a British businessman and a Liberal Democrat politician and became the party's spokesperson for Trade and Industry. It surely must come as an embarrassing link given that the FRC is a company limited by guarantee, which is partly funded by government and the industry and its Board of Directors and appointed by the Secretary of State for Business, Innovation and Skills?


"It and its subsidiaries play crucial roles in the oversight and development of corporate governance standards in the UK, such as the UK Corporate Governance Code and standards for the accounting industry". -Source: Wiki


Now regardless of all this being in the past I would call one time Tory donor Clive Thompson's links with government a little too close to home wouldn’t you?

[debaharvey]

Nick,

Thanks for all your work on this it comes as no shock as we 3 are all to aware of the intricacies that Farepak was.

[louise1mcdaid]

Jul 13, 2012 16:31:38 GMT 1 nickd said:

What Counsel says



Roy Martin QC


Counsel's note to Farepak Victims Committee..


First item to be discussed at todays meeting was the collapse of the Directors Court Case. Mr Roy Martin QC - Former Dean of the Faculty of Advocates has worked with the Farepak Victims Committee over the years. Mr Martin has produced a Joint Note which we handed to Mr Cable; hopefully we will get answers soon. Here's a copy of the note..

Louise McDaid & Debra Harvey

JOINT NOTE BY COUNSEL

For

Mrs Louise McDaid on behalf of the Farepak Victims Committee

Re: Collapse of Farepak Food and Gifts Limited

________________________________________________________________

1.We refer to the request by email from Mrs Louise McDaid who is the Chair of the Farepak Victims Committee.


2.As the members of the Committee are aware, on 20 June 2012, the Secretary of State for Business, Innovation and Skills discontinued his action brought in the High Court in London for disqualification of the Farepak directors. The next day, the judge, Mr Justice Peter Smith, issued a statement. He did so in order to explain why the “defendants are in my view right to be vindicated and, second, to explain to the depositors what actually happened with their monies” (paragraph 28).


3.The judge describes the case made by the Secretary of State as a challenging one because the Secretary of State did not attempt to say that liquidation was inevitable before October 2006. Nor did he say that the directors’ decision to seek a solvent solution was the wrong one (paragraph 103). Instead, he attempted to show that a solvent solution was possible but that the directors were at fault in not achieving it. However, the evidence led suggested that the directors had done what they could to achieve it: “they made genuine strenuous efforts to save the group and the depositors” (paragraph 20); “They did everything, as far as I can see, possible to save the group” (paragraph 119).


4.The judge is critical of the way in which the case was conducted. In essence, the reason he concludes that the failure of the case was inevitable is that the witnesses all said that “they had no criticisms of the defendants’ conduct in the relevant period” (paragraph 72). Their affidavits did not properly reflect their views on the directors’ conduct but had been “unfairly slanted” against the directors (paragraph 48).


5.In the latter part of his statement (paragraphs 77 to 128), Mr Justice Peter Smith analyses why the company failed. He is clearly critical of the Bank of Scotland, although he points out that legally they were entitled to do what they did (e.g. paragraphs 95, 118, 120). He suggests that further bank funding of £3 - £5 million would probably have saved the group but that the bank were not prepared to provide that funding (paragraphs 118). It would appear that a funding gap of £5 million arose initially in December 2005 when the group’s facilities were renegotiated (paragraphs 81 to 82). The judge appears to be most critical of the Bank having “in effect forced the directors” (paragraph 116) to continue trading in the period September and October 2006 when it had formed the view that insolvency was inevitable and that it had become their preferred option. During those two months, £10 million of deposits was received all of which (paragraphs 22 to 23 and 116 to 117) went to the benefit of the Bank – £4 million in reducing the group’s indebtedness and £6 million used in the other companies in the group which were sold in a pre-pack administration deal.


6.Earlier in that passage, he describes the way in which Farepak carried on business, which involved the use of the deposits to fund the other parts of their business (paragraph 79). He says that only Mr Johnson of Park was critical of that approach. The money was swept into the accounts of other group companies, reducing those companies borrowings and therefore interest charges.


7.We have been asked in the light of that statement what questions might be put to the Secretary of State. Some possible lines of enquiry are as follows:

Was the case brought against the directors on the wrong basis (paragraph 71: “This is clearly unfair to the defendants, because the wrong case is being presented against them”)?

Why was a case run on the basis that the directors were at fault when the witnesses did not support that position (paragraphs 72 and 76)?

Does the Secretary of State accept the judge’s conclusion that the directors were not to blame for the failure of the company (e.g. paragraph 125: “What is missing from the story is any justified complaint against these defendants”)?

Why was the case not better prepared? In particular, why had it not been understood before trial what the witnesses’ position was on the critical issue, the responsibility of the directors for the failure of the company?

Does the Secretary of State accept that there was fault on his part or on the part of the Department in the way in which they chose to present the case?

Were the following particular complaints against the directors considered and rejected:

(a)seeking to achieve a solvent solution and therefore trading on and continuing to take deposits in the hope that that would prove possible;

(b)not telling the bank in December 2005 that the group’s funding was £5 million short;

(c)not ring-fencing the deposits taken after April 2006, or at least the deposits taken in September and October 2006 (i.e. using the deposits to fund its businesses: paragraphs 79ff and 116)?

If these complaints were considered, can the Secretary of State explain why these points were rejected as part of the action against the directors?

Does the Secretary of State intend to call on the Bank of Scotland for a further substantial contribution to the victims fund?

Does the Secretary of State consider that he has any power to compel the Bank to make such a contribution?

Will the Secretary of State make transcripts of the evidence available (or pay for transcription)?

Will the Secretary of State release the Insolvency Service report on the directors, or the liquidators’ report to the Insolvency Service?


8.We understand that the meeting with the Secretary of State is on 12 July 2012. If the Victims Committee wishes to discuss any of these matters beforehand, we should be happy to hear from them.



Roy Martin Q.C. Christopher Wilson
Advocates’ Library
Parliament House
Edinburgh EH1 1RF
9th July 2012

This is the response my e-mail to Graham Horne from the Insolvency Service re Mr Martin's Note for the Farepak Victims Committee. Handed to Mr Cable during our Meeting.

Louise

Thanks for your email and the attached note from counsel.

As I said at the meeting with the SoS I have commissioned a lessons learned review in relation to the Farepak disqualification. I have copied your email and the attached note to the official leading that review so that he can consider the points made in the note as part of his review.

I should say at the outset that the review will involve seeking some independent legal advice on the issues arising out of the withdrawal of the disqualification proceedings and the observations of the judge in his statement. That will take a little time and it is important that the process is not rushed if the review is going to have influence on future cases or processes. The current expectation is that the review will conclude by the end of August.

We will aim to put in the public domain as much of the review findings as possible but it may well be that issues such as data protection and legal privilege will prevent some aspects of the review being made public.

Your counsel’s note makes mention of disclosure of the Insolvency Service’s report, and of transcripts of the hearing. We are seeking legal advice as regards the report, but it may be that it cannot be made available as the investigation was conducted under section 447 of the Companies Act 1985, which prohibits disclosure except through very narrow gateways.

We have no objection to the disclosure of transcripts of the court hearing. In this case we, together with the defendants, paid for LiveNote transcription; however, the defendants have objected to the release of these transcripts to third parties which means that we cannot provide our copies to you. Anyone can obtain a transcript of a public hearing although costs can be high (c. £150 per hour). If you wish to obtain a transcript, notwithstanding the cost, you should contact the court to arrange this.

I hope this is helpful.

Graham

[louise1mcdaid]

Just for info everyone - Katy Clark MP, Jessica Morden MP and Robert Buckland MP have a meeting with Norman Lamb on the 16th October 2012 to discuss issues relating to Insolvency matters. Will keep everyone posted re outcome of this meeting.

Also Katy has applied for a debate in Westminster Hall week beginning 10th September 2012 "Farepak and regulation of the Prepayment Industry" - we should know next week if she has been successful.

Fingers crossed!

[louise1mcdaid]

As a consequence of the collapse of the Govt's court case against EHR/Farepak Directors, we were told that a lessons learned review would be conducted and released the end of August. The Farepak Victims Committee e-mailed the Insolvency Service for update and this is the response received from Andrew Shore:

Dear Louise,

Thank you for your email. I have spoken to the official leading the lessons learned review who informs me that, unfortunately, there has been a delay in obtaining the legal input we require due to the summer holiday period: as a result, the review is now expected to conclude at the end of September.

[louise1mcdaid]

Secretary of the Farepak Victims Committee Deborah Harvey wrote to Govt regarding regulation of the Insolvency Practitioners - this is the response we have had from Graham Horne Deputy Inspector General - The Insolvency Service - YOUR COMMENTS WOULD BE WELCOME!

Dear Deborah

Marcelle has asked me to respond to the parts of your email that relate to the regulation of insolvency practitioners.

I would confirm that the Insolvency Service is unable to intervene directly in any administration or liquidation, and it is the recognised professional bodies (RPBs) that properly consider complaints about insolvency practitioners' professional conduct. I understand from your email that you are aware that this is the case, and your concerns are in respect of the system of self-regulation as a whole.

You have asked that the government step in to increase the regulation of insolvency practitioners, as you consider that the current laws do not protect creditors. Changes to legislation or government policy are of course a matter for Ministers and Parliament to decide. I can say however that recent discussions with the RPBs have made progress on a package of measures designed to increase consistency and transparency in the regulation of IPs. This includes a common gateway for complaints which would be operated by the Insolvency Service, better communication to complainants about the progress of their complaint, and also greater feedback on the progress of complaints to the Insolvency Service as the "regulator of regulators". Ministers are currently considering whether this package is strong enough to provide the required levels of confidence in the regulatory regime.

I do appreciate that the above is unlikely to address all of your concerns. I hope you will see that this is an area that is under consideration by Ministers, and it is for that reason that I am unable to comment further at present.

Graham

[louise1mcdaid]

CAMPAIGN UPDATE

On the issue of regulations for the Prepayment Industry. As everyone will know Katy Clark MP/Jessica Mordan MP (as well as others) have been working on our behalf. Katy has tabled an amendment to the Enterprise and Regulatory Reform Act. Essentially is places a duty on Company Directors to protect pre-payment customers. The Bill is currently due to be debated the week of the 15th October. It reads as follows:

New clause: Duty of company directors to protect consumer pre-payments

(1) A director of a company must ensure

(a) that provision is made for consumers to be reimbursed where they have made payments, in full or in part, in respect of goods or services that the company is unable to deliver, and

(b) that a statement of the nature of this provision is made available to consumers and prospective consumers.

(2) A person who fails to carry out his duty under subsection (1) is guilty of an offence under section 993 of the Companies Act 2006.

Nearer the time we will get into action re contacting MPs asking them to support it.

[louise1mcdaid]

Katy’s also asked a number of Parliamentary Questions on this recently including on the lessons learned report and New Zealand layby sales model.

The transcript is as follows:

Katy Clark: To ask the Secretary of State for Business, Innovation and Skills whether the review into the lessons learnt from the Farepak disqualification proceedings will be made public in its entirety. [119312]
...
Jo Swinson: I intend to publish as much of the report of the review into lessons learnt as possible except for any aspects that may be subject to data protection and legal professional privilege issues.

Insolvency
Katy Clark: To ask the Secretary of State for Business, Innovation and Skills if he will commission a detailed study of the lay-by sales scheme in place in New Zealand and the insolvency arrangements relating to pre-payment customers. [120415]

Jo Swinson: We are aware of the protections available to pre-payment customers under New Zealand consumer law, but we have no plans to commit resources to such a study at this time. We fully appreciate the significant impact that an insolvency can have on pre-payment customers and we have been working closely with the pre-payment industry and consumers, particularly those affected by the collapse of Farepak, to explore how they may be better protected in the future through non-regulatory solutions. This work is ongoing.

[nickd]

Another whitewash?







Yet more of the white stuff....



When ever I see words such as "except for any aspects that may be subject to data protection and legal professional privilege issues" I find myself concluding: you just know there's something they don't want anyone to know.


I find it incredible that BSI always seem to think that "non-regulatory solutions" are the answer; why?


Isn't it strange how Vince Cable and the government continually remind us all how the 'economic crisis' exists because Labour purportedly never 'got to grips' with the banks and finance industry and yet they do nothing to impose any form of powerful & punishing regulation over the conduct of the finance & commercial sector?

Their track record...

• No to capping maximum of pay days loan firms
  
  
• No to legislation in the Farepak case
  
  
• No to any compelling enquiry over insolvency & legal costs in Farepak fiasco
  
  
• No to any explanation over why the HMRC's case against the directors failed so spectacularly by bringing it in to court in a hugely expensive trial which went pear - shaped because it was brought on completely the wrong footing .
  
  
• No to any form of enquiry in to the assets of directors and shifting of the same.
  
  
• No significant progress into financial accountability within the sector
  
  
• No to criminal prosecutions on grounds that financial fraud if just too expensive to take to court.
  
  
• Yes to cosy financial 'fines' as soft touch deterrents rather than criminal sanctions; the cost of which is met by the tax payer by virtue of it being passed on to the consumer end user.
  
  
• Yes, yes yes to encouraging commerce to the UK at any price; regardless of how hard it hits the cash starved consumer!

[/b][/i]
[/li][/ul][/size]


Strange how they are never short of regulation when it comes to crippling social 'security law' though isn't it?

[louise1mcdaid]

FAREPAK COURT COSTS

www.theyworkforyou.com/wrans/?id=2012-09-18a.117256.h&m=40044

Mike Weir (Angus Scottish National Party)

"To ask the Secretary of State for Business, Innovation and Skills how much his Department has spent on legal costs in respect of the former directors of Farepak."


Jo Swindon (East Dunbartonshire Liberal Democrat)

"The Insolvency Service's costs of bringing disqualification proceedings in Farepak and European Home Retail were £909,586.99 since January 2011. These costs were met out of The Service's budget."

In 2011/2012 1,151 directors were disqualified. Of these 231 disqualification orders were obtained at court and a further 292 undertakings were volunteered and accepted after proceedings were issued at court. In 2010/2011 1,437 directors were disqualified. Of these 287 disqualification orders were obtained at court and a further 343 undertakings were volunteered and accepted after proceedings were issued at court. The Insolvency Service spent £4,968,740 during 2011/2012 on disqualification litigation and legal advice.

[louise1mcdaid]

www.thetimes.co.uk/tto/business/industries/retailing/article3556717.ece

THIS NEEDS AN URGENT GOVERNMENT RESPONSE!


Taxpayers are facing a legal bill of more than Pounds 6 million in the wake of the Department for Business's botched attempt to disqualify the former directors of Farepak.

In addition, Sir Clive Thompson, once the chairman of Farepak's parent company European Home Retail and a former chairman of the CBI, has begun legal proceedings against MPs for defamation.

Only two directors of the collapsed Christmas saving club and European Home Retail decided not to fight disqualification proceedings brought by Vince Cable's department; the other seven were cleared of wrongdoing by a judge in June.

Jo Swinson, the newly appointed parliamentary under-secretary with responsibility for employment relations, consumer and postal affairs, disclosed in a parliamentary question that the Insolvency Service, a part of the Business Department, had spent Pounds 909,586 since January last year on bringing disqualification proceedings. However, the Insolvency Service said yesterday that it would pay an additional Pounds 5.1 million for the legal costs of those directors who had challenged the ban.

One former director said he had calculated that the total cost to the taxpayer would be about Pounds 20 million and claimed the case had been brought for political reasons. "In my opinion, the Secretary of State [Dr Cable] looked at this and said he would take it on," he said. "And why I don't know. Because of his populist credentials? Because he is a man of the people?" Farepak went under in 2006, owing Pounds 37 million to about 120,000 savers.

Mr Justice Smith, the judge presiding over the disqualification hearing, vindicated the directors and blamed HBOS, now part of Lloyds Banking Group. He ruled that evidence was slanted unfairly against the directors. Joanne Ponting and Stephen Hicks were the two directors who chose not to fight a ban, but after the proceedings collapsed against the other seven, the department said that it would review their ban. The Insolvency Service said yesterday that the review had been completed and that it would not contest an attempt by the directors to lift their bans.

Sir Clive said that the directors had been diminished by the case, and that there were "potentially 20" MPs who had made defamatory comments not protected by parliamentary privilege. Other directors did have grounds to claim, he said.

[nickd]

IT is an outrage Louise that so much public money has been squandered away in legal fees. The HMRC action was destined to fail from the start. I'd be interested to know how it is that 'cash starved' directors (cough splutter) seem to be able to stump up legal fees for defamation actions but couldn't find the cash to pay back what they owe!

[debaharvey]

PLEASE EVERYONE READ THE TERMS & CONDITIONS ESPECIALLY NUMBER 15 OF THE FIRST SET OF TERMS AS WAT THEY ARE SAYING IS IF YOU WERE TO LOSE YOUR CARD AND SOMEONE GETS HOLD OF IT BEFORE YOU HAVE REPORTED IT MISSING THEN THEY WILL ONLY HONOUR THE LAST TRANSACTION WHICH = YOU LOST YOUR CARD, I SAW YOU DROP IT, I PICK IT UP AND GO INTO THE STORE AND SPEND WHATEVER CASH YOU HAD SAVED ON IT, IN THE MEANTIME YOU GET HOME AND REALISE YOUR CARD HAS GONE......YOU PHONE THE HOTLINE AND THEY SAY WELL I AM SORRY BUT THE LAST RECORDED TRANSACTION WAS TODAY WHEN YOU SPENT IT ALL..........WHICH LEAVES YOU OUT OF POCKET...............ALSO IF THE COMPUTER FAILS AS IT DID IN NATWEST BANK ................THEY WILL NOT BE RESPONSIBLE IF YOUR CASH HAS BEEN WIPED OUT..........JUST BE VERY VERY VERY CAREFUL PLEASE, SAVE YOUR CASH.........ITS YOURS.........DONT LET SOME FACELESS SUIT WORK OUT HOW TO TAKE IT FROM YOU

m.iceland.co.uk/bonus-card/

Read more: mylegal.proboards.com/index.cgi?action=display&board=campaign&thread=652&page=2#ixzz28W1BauQU

[debaharvey]

Dear Martha,

As we have seen by your update today on the Farepak Website, the cheques are at present being processed and as such a lot have to be processed it will be a further 2-3 weeks before this has been achieved.

As you are aware Martha, both myself and Louise McDaid have been very vocal about Farepak and we have done everything we could think of to stop this kind of loss ever happening again. We appreciate that you are 'doing a job', and that the Creditors Committee were telling you to keep looking for more funds, however would you not agree that SIX YEARS is a ludicrous amount of time to take in resolving this fiasco? Do you not agree that realistically this should have taken no longer than 12 - 18 months from beginning to end? Surely the 5 people you had on the Creditors Committee were being naive in not realising that your costs were exceeding any possible dividend? Was it ever explained to them that for Every Day that you and you team were working on Farepak it was costing ALL OF US?

As we are now at the end Martha will you please give us the exact cost of this saga from 13 October 2006 - 13th October 2012 the Administration and the Liquidation and just so everyone is clear how much did you raise in total for the creditors including agents and customers, and more over how much was the final dividend to be paid from BDO DO NOT ADD THE EX-GRATIA AWARD FROM THE BANK just give us the figures that you raised was it 13p or has it gone down further again or perhaps it rose slightly. The £8M from the bank equates to 19p so added to your figures and please do not say approximately Martha because there is no need anymore this is the end of the line so please give us the answers to the questions we have been trying to get answered for the last 6 years. I think we deserve that much at the very least and I would like to think that you agree.

Kind Regards

Deb & Louise

Read more: mylegal.proboards.com/index.cgi?action=display&board=campaign&thread=652&page=2#2176#ixzz28W2LanvU

[debaharvey]

BDO are sorting this mess and Farepaks mess and I find it all a bit to cosy when you consider Clive Farepak Thompson Chairman and director of Farepak and KPMG is it me or is this as stinking as I think it is???

www.telegraph.co.uk/finance/newsbysector/9570662/Financial-Times-printer-Newsfax-in-administration.html

[nickd]

Hi Debra & Louise

Where you say Thompson was a director of Farepak and 'KPMG' can you clarify.

Tell me more about the KPMG links you have?

[louise1mcdaid]

EVERYONE PLEASE SIGN

We Request A Public Enquiry into Farepak Directors

Responsible department: Department for Business, Innovation and Skills


We are asking the Government to change the law surrounding the pre-payment industry and to hold a Public Enquiry regarding Farepak & European Home Retail. 13/10/ 2006 Farepak went into Admin owing £38M to customers & Agents who’d pre-paid for goods that never arrived. The Admin & subsequent Liquidation has cost approx. £9M to realise just approx. £5M. It’s unfair & unjust that those whose money was taken & used recklessly bolstering the parent company WITHOUT the permission or knowledge of the Agents & customers are to pay the £9M bill accrued by BDO. Then to add insult to injury the taxpayer has now been given a £6M legal bill due to the Director Disqualification case collapsing. Then in a Times article Sir Clive Thompson Chairman & Director of EHR is going to sue for deformation of character. Legally this maybe allowed but MORALLY IT’S OUTRAGEOUS & LAWS NEED TO BE CHANGED We request a Public Enquiry is granted & held ASAP

epetitions.direct.gov.uk/petitions/39813

Thank You

[louise1mcdaid]

BDO have issued update today informing Farepak Victims that cheques are in the post. Total dividend is as follows:

14.17p in the £ from the Liquidation
An ex-gratia (voluntary) payment by Lloyds Banking Group of 21.48p in the £

Total payment is 35.65p/£.

Interestingly BDO do not mention how many Farepak Victims they will be issuing cheques to so maybe the previous number of 114,000 has reduced and this is the reason why the dividend from the liquidation has increased from 13p/£ to 14.17p/£? We will of course find out.

www.farepak.co.uk/

I had £400 taken and will receive a cheque for £142.60p which is broken down as follows:

The liquidation by BDO totals £56.68
Ex-Gratia payment from Lloyds totals £85.92.

Also released today is the final Liquidation Fee from 4 October 2007 to 1 October 2012

www.farepak.co.uk/Receipts&PaymentsSummary.pdf

Liquidation fee is £6,548,932 if we take away Trust money paid out to Farepak Victims (£246,450) Total fee is £6,302,482.

Administration Fee from the 13th October 2006 - 28th September 2007 totals £2,715,339

www.farepak.co.uk/FinalAgentsReport.pdf

TOTAL ADMINISTRATION/LIQUIDATION FEE = £9,017,821.

IF final claims received from Farepak Victims is 114,000 it has cost approx £80 per Victim in Administration/liquidation fees.

So in short it has cost me £80 to get back £56.68 back.

BDO are handling (free of charge!) the ex-gratia (voluntary) payment from Lloyds given as a consequence of the collapse of the Government's Court Case against the EHR/Farepak Directors. In BDO's (Martha Thompson) words "With respect to the investigation conducted by the Government’s Department for Business, Innovation and Skills, the Joint Liquidators have had no involvement with this other than to cooperate fully with the Government’s requests for information. I can confirm that no Liquidators’ fees have been charged in respect of the time spent cooperating with the Government".


GOOD DEAL?

[debaharvey]

Both myself and Louise are outraged at the latest figures from BDO and I have to say there are some inconsistencies these are the emails sent to BDO today:
Dear Martha,

Thank you for bringing this Farepak fiasco to a close. Would you please confirm a few matters for us please, they are as follows:
How many customers and Agents have received a dividend payment as it seems that it has dropped from 116,400 admittedly some were sadly deaths and others were duplicate claims. However, as you are now in a position to confirm the exact head count we would be very grateful.
At the bottom of your latest statement that you posted online, could you explain why you have a 'Balance in Hand' figure of £576,245 and what will that amount of money be used for.
At the end of the Administration you state that you had a surplus of £3,784,589 and at the end of this process you have paid a dividend of £5,480,149 a difference of £1,695,560 I am sorry Martha, maybe its just me, however its taken 5 Years to realise just under £1.7 Million. That just seems outrageous that its taken so long to achieve so little.
In May 2008 you managed to raise a £4M out of court settlement from the directors, or some of the directors if you had added that to the £3,784,589 surplus from the Administration that would have equated to £7,784,589 which if you take into account your fees for 17 Months work would in no way be as high as they are now, nor would you have incurred so many costs such as media enquiries etc it seems to us that everyone could possibly have been better off.
If you would be so kind as to answer these last few questions for us Martha we would be very grateful.

Kind Regards

Deb & Louise

P.S.
I have just looked over the receipts again and after the Administration the 'balance in hand' was £3,999,146 however on the 'final receipts' it states the amount carried forward is £3,784,589 that would equate to a difference of £214,557 would you clear this figure up for me please and explain where this £214,557 went.

Many thanks in advance for your co-operation in this and my previous email

Kind Regards

Deb & Louise

Obviously we will update as soon as we get a reply however we do not expect one from her or BDO

[nickd]

Let me have a mull over the final distribution figures Louise & Debra. Then I'll knock up a post summarising where it all went and who comes out of this unscathed, indeed who comes out of this better off!

I wonder if they are holding a certain amount back for further legal fees?

[louise1mcdaid]

Hi Nick

We have had the following response from BDO regarding Cash in Hand

"The law that sets out how liquidations must be run mean that there are still a number of steps that the Joint Liquidators must take before the liquidation can be formally completed. These actions may take up to 7-8 months to complete. The balance at hand covers all costs associated with these remaining actions, including the cost of retaining a Claims Management Team to help customers and agents with any queries they may have about their cheques."

Thanks again Nick for all your support.

[louise1mcdaid]

On the 15th October the FVC received the following response to our e-mail from the Insolvency Service re the Lessons Learned Review (Govt response to the collapse of the Court Case against the Farepak Directors):

"The review is now complete and we have concluded our consideration of legal professional privilege issues around the release of the review report. We are now finalising arrangements for the release of the report, and hope to get back to you in the next week or so".

It is now the 30th of October and there has been NOTHING!