'Vindication' for ex-Farepak bosses

FarepakA lawyer has said former directors of a Christmas hamper business which collapsed leaving tens of thousands of savers out of pocket had been cleared of blame by a High Court judge.

Richard Highley, who represents former bosses at Farepak, said Mr Justice Peter Smith's analysis of the firm's downfall six years ago was a "total vindication" of directors' conduct.
Mr Justice Peter Smith had pointed the finger at Farepak's bankers during a hearing at the High Court in London. He suggested that HBOS bosses had sat like "stookies" - a Scottish slang term for plaster casts - while bosses had done "everything possible" to save the firm.

"It is incredibly sad that families lost out financially at a time of year when people can least afford to be out of pocket," said Mr Highley, who works for law firm DAC Beachcroft.

"The judge's conclusions on what led to the insolvency make compelling reading and is a total vindication of the directors' conduct.

"We are pleased for our clients whilst regretting that Farepak customers have still not been compensated."

Mr Justice Peter Smith was speaking on Thursday after a Government companies watchdog abandoned attempts to penalise former Farepak bosses by having them barred from being company directors.

Lawyers representing the Insolvency Service - part of the department headed by Business Secretary Vince Cable - halted litigation after "consideration of evidence" given at a High Court trial which had started in London nearly a month earlier.

The judge said HBOS had taken a "hardball approach" prior to Farepak's demise in 2006.

In 2008, the Government pumped billions into a number of banks, including HBOS, to prevent a financial sector collapse in the wake of an economic crisis. Mr Justice Peter Smith added: "It is ironic that if the bank's reputation for playing hardball had been repeated by the Government ... HBOS would not be here and that is something else that HBOS might like to think about."
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