Farepak starts to send cheques out, three years after its collapse

Administrators acting for the collapsed Christmas hamper firm Farepak yesterday said they have started sending out cheques to customers who were left out of pocket by the group&rsquo;s demise.<br /><br />BDO Stoy Hayward, which is acting as liquidator, said cheques worth a total &pound;240,000 have been sent to 6,000 customers who placed orders in the company&rsquo;s final weeks. Farepak collapsed in October 2006.<br /><br />The compensation comes after a lengthy legal battle regarding Farepak&rsquo;s Trust, which was set up shortly before the group went bust. <br /><br />The Trust was meant to ringfence customers&rsquo; money. But payments to victims were halted after questions were raised over whether the Trust, which was not set up properly, actually existed and who should be given the money. <br /><br />The cheques are only being sent out to those whose claims have been agreed by the court. <br /><br />But the court&rsquo;s ruling will not affect the majority of the 122,000 customers, who are only expect to receive 5p for every &pound;1 owed.<br /><br />Farepak customers, who tended to come from low-income backgrounds, lost an average of &pound;400 each, with some losing up to &pound;2,000.