This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6188867.stm

The article has changed 3 times. There is an RSS feed of changes available.

Version 1 Version 2
High Court ruling for Farepak £1m Ruling frustrates Farepak savers
(about 4 hours later)
A High Court ruling is set to decide if a select number of Farepak subscribers will be able to share a £1m refund. Farepak savers have been frustrated in their attempts to recover some money in time for Christmas.
At stake is the legal status of money accrued between the collapse of the savings club in October and the time it went into administration soon after. A High Court judge said he could not yet award £1m in lost funds to about 200 savers and deferred further judgment in the case to the new year.
The court may rule the money belongs to customers, but, if so, it appears there would be a delay in any award after the judge highlighted "technical" issues. At stake was the legal status of money accrued between the collapse of the savings club in October and the time it went into administration soon after.
The case was adjourned in early afternoon to discuss legal arguments. If successful, savers would have got back sums ranging from £17 to £1,500.
Farepak's collapse led 150,000 people to lose a total of up to £50m. Law not sympathy
'Great joy' Farepak's collapse resulted in 150,000 people losing up to £50m.
The ruling, to be decided by Mr Justice Mann, focuses on whether local agents held the money in the interim fund "in trust" on the firm's behalf or whether it held the money for the customers. Savers are likely to see only a fraction of their savings, equivalent to about 5p in the pound, returned to them.
If it is decided the latter applies, then former Farepak savers should receive that money. At the heart of Monday's ruling was whether local agents held the money in the interim fund "in trust" on the firm's behalf or whether it held the money for the customers.
If not, then the money will go into a general fund to be shared between all the company's creditors. They[the funds]must be disposed of properly and on the basis of law, not purely on the basis of sympathy and Christmas Mr Justice Mann Based on the evidence presented to him, Mr Justice Mann said he was unable to award the money to the savers at this stage.
Lexa Hilliard, the administrators' counsel, has said the final decision could mean hundreds of people getting more money to spend during the Christmas and New Year period. In doing so, he accepted that Farepak subscribers were suffering real hardship at the moment and that many would consider the legal arguments preventing a cut-and-dried decision as "technical and unmeritorious".
The range of money agents could receive ranges from between £17 and £1,500, for distribution to customers. But he added: "They[the funds]must be disposed of properly and on the basis of law, not purely on the basis of sympathy and Christmas."
For them "it will be a source of great satisfaction and great joy," said the counsel. He did not rule out further hearings but these will not be possible until January.
Treasury review
Lexa Hilliard, counsel for the firm's administrators, earlier said the final decision could mean hundreds of people getting more money to spend over Christmas and the New Year.
It would have been "a source of great satisfaction and great joy", she said.
The Treasury is set to launch a review of Christmas saving clubs and the lack of regulations governing them, following Farepak's collapse.The Treasury is set to launch a review of Christmas saving clubs and the lack of regulations governing them, following Farepak's collapse.
On average, Farepak customers are estimated to have lost about £400 each, but some are thought to have lost nearer £2,000.On average, Farepak customers are estimated to have lost about £400 each, but some are thought to have lost nearer £2,000.