The Insolvency Service yesterday withdrew its action against former directors of Farepak Food & Gifts Limited (Farepak) and its parent company European Home Retail Group PLC.
The application for disqualification orders against the directors was in progress at the High Court. It was withdrawn following the judge’s questioning of whether the action should continue in the light of, amongst other matters, the reported actions of HBOS in refusing to place Farepak customers’ money into a separate trust account prior to Farepak’s collapse. If HBOS did refuse to do that, it would have meant that more cash was available to meet creditors’ claims. HBOS was a major creditor.
See also: Farepak: what the judge said
Business Secretary Vince Cable has referred HBOS, now part of Lloyds Banking Group, to the FSA after his prosecution of the Farepak directors collapsed last week. In a statement Mr Cable also said he would also be contacting HBOS to establish how they would respond to calls for the bank to pay more into the Farepak creditors’ compensation fund – Daily Telegraph