Farepak calls in Taylor Wessing for insolvency

Taylor Wessing has bagged the lead role advising the administrators of Christmas hamper company Farepak on its insolvency proceedings.

Partner Alison Goldthorp has been instructed by BDO Stoy Hayward adminstrators Martha Thompson and Shagun Dubey to act on the adminstration.

Farepak provided Christmas hampers and vouchers to families in exchange for periodic payments throughout the year, but filed for insolvency in October owing more than £40m to 120,000 customers.

None of those subscribers will now get their hampers and thousands of claims are expected from customers and their agents in respect of the losses.

Customers have also been told that they will not get a refund of the payments they have made.

The Government is also taking an interest in the administration, with Consumer Affairs Minister Ian McCartney in talks with the Office of Fair Trading (OFT) about the possibility of an investigation into the regulatory framework in which Farepak operated.

Such an investigation would involve the cooperation of the Department of Trade and Industry and the Financial Services Authority (FSA) as well as the OFT.

The company was not subject to regulation by the FSA as no interest was paid on the money it held.

A charity, the Farepak Response Fund, has been established by the Government to compensate people who are owed money by Farepak, with companies such as HBOS, Tesco, Marks & Spencer and Sainsbury’s all contributing.