Farepak collapse gives rise to SNP focus on conduct of liquidators

It is now five years since the October 2006 collapse of the Farepak ‘Save for your Christmas Hampers’ scheme – which went into administration owing £37 million to around 119,000 savers.

These folk each lost an average of £310 and up to £2,000 for some.They will, at this stage in 2011, get back something like 15p in the pound.

Alongside this amount of time and the derisory return to savers, the administrators, liquidators and their legal advisers  (Farepak went from administration to liquidation on 4th October 2007)  are due £8 million.

Mike Weir, the SNP party spokesperson on regulatory reform, is concerned that the insolvency sector of the financial industries is literally raking off the system at the expense of creditors.

He is reported to have discovered instances where some creditors have had to wait for 35 years, with some dying in the meantime, for administrators’ work to be completed. He has found between 19,000 and 20,000 liquidations commenced over five years ago but not yet completed; with over 6,500 of these remaining unfinalised after 20 years.

With good reason, Mr Weir is now calling for a UK government investigation into the conduct of this part of the financial services industry.

NOTE: For information, here is a 19 October 2011 update on the Farepak situation – hardly the product of an £8 million pound operation – to date.