Farepak savers payout trebled

Savers who lost money when Farepak, the Christmas savings firm, collapsed into administration four years ago will now receive 15p for every pound they lost, it was revealed today. 

The company’s administrators, BDO Stoy Hayward, have reached an agreement with the group’s directors that means they will pay up to £4m from their own pockets in compensation to the 15,000 customers who subscribed to the scheme. Under the latest settlement anyone who put in £400 would get £60 rather than the £16 previously estimated. However, the total is far lower than the £40m that was lost in total. Swindon-based Farepak encouraged customers, the majority of which were from low-income households and pensioners, to make monthly deposits in exchange for vouchers sent out before Christmas. BDO Stoy Hayward, said in a statement: “The action issued by the joint liquidators of Farepak Food and Gifts Limited against the directors of Farepak has been settled with no admission of liability by the directors... The terms of the settlement are confidential.”

 No date has yet been set for the new settlement to be paid.

Posted at 09:02PM Apr 26, 2010 by Kelly Board in Insolvency  |  Comments[0]

Corporate Insolvencies Fall

Business insolvencies dropped significantly to 2,160 in total for March 2010, compared to 2,512 in March last year, according to research.

The figures, published by pH, part of credit reference agency Experian, revealed that insolvency cases in March 2010 rose slightly from February, but were still significantly lower than in March 2009, which the number of business insolvencies peaked.

All regions, apart from Scotland, saw a small rise in insolvency cases in March compared to February. Scotland was the only region to see its insolvency rate fall in this period, with cases down from 0.09 per cent in February to 0.08 per cent in March. The East Midlands, Greater London and the south east respectively had the highest number of insolvency cases.

 Rolf Hickmann, managing director of pH, said: “Unlike the last recession, when business insolvencies were more than double the rates witnessed during this recession, the business economy has not been admitted to intensive care.

 “In fact, insolvencies have been coming down since early 2009 and, despite the odd monthly fluctuations, are now far more stable.”

 Insolvencies in the media, electrics and food retailing industries all showed small rises, while other sectors reported a drop in the number of cases. The property, retailing and leisure and hotels industries reported significantly less insolvency cases than March 2009, indicating that there is a slow recovery from recession in these sectors.

 The average financial strength score for UK businesses also deteriorated slightly from 81.18 in February to 80.99 in March. Small businesses of one to two employees suffered the biggest deterioration, but compared to March 2009 the average financial strength of businesses showed significant improvement.

 Hickmann added: “It’s the same picture when you look at the financial strength score. Although this deteriorated slightly in March, it has been steadily getting back to normal since the economic crisis was at its worst in mid 2008.

 “Despite March’s figures, our data shows that micro businesses, the one and two man-bands, are the most resilient in the UK.”

Posted at 03:27PM Apr 26, 2010 by Marc Stenton in Insolvency  |  Comments[0]