Farepak trial collapse: who's to blame The collapse cost Ms Hall, who now leads the pressure group unFairpak, and her 120,000 fellow savers £37m. It ruined their Christmas. Nearly six years on it continues to wreak havoc on the reputation of some of the most high-profile directors and politicians in the country. Directors of Farepak such as Sir Clive Thompson former CBI president, were pursued through the courts; Business Secretary, Vince Cable's reputation, has been questioned and the work of the Insolvency Service savaged. All for just £3m. As was spelt out in the High Court last week Farepak never needed to go under. A loan from HBOS of just a few million pounds at the right time would have allowed the company to stay afloat. Speaking after the disqualification case against the Farepak directors collapsed on Wednesday, the judge who is overseeing it, Mr Justice Smith, said: "It appears, in rough and ready terms, that further investment from the bank of £3m to £5m would have probably saved the group. But HBOS was not prepared to make it. The statement came at the climax of a four-week trial brought by Mr Cable. The case was supposed to end in the disbarment of seven Farepak directors. Instead it ended in a severe rebuke for the Business Secretary and the work of his department. Witnesses statements produced by the Insolvency Service were "unfairly slanted" against the directors. Evidence was "unfair and oppressive." Witnesses were let down. The verdict by Mr Smith could barely have been more damning. Not only did he entirely vindicate the directors of Farepak, he detailed in exacting, excruciating detail what had gone wrong. With the case against the directors in tatters the depositors of Farepak, all 120,000 of them, found themselves robbed not only of their money, but also of answers. Mr Smith attempted to fill the gaps. He said: "I felt strongly in this case that all the depositors would have been left with a sense of being cheated again if they did not understand why the case had collapsed against the people who have been pursued for the last five years as being the evil people who caused their losses. In a statement that lasted more than an hour and a half, Mr Smith explained how Farepak used investors" money to fund borrowings from HBOS and provide working capital for other businesses within the group. He dated the problems to the end of 2005 when Farepak found it was £5m short of funding and failed to make payments to key suppliers. He then explained the efforts that were made by the directors to find a solution. ABN Amro and Goldman Sachs were approached to provide or source more debt. The talks with Goldman almost succeeded until the bank changed its terms leaving Farepak with a £200,000 bill to pay for Goldman's costs. A fund-raising was investigated but failed. The sale of a subsidiary was also pursued - to no avail. The reason for the lack of success? "All of these proposals, failed ... on the flinty ground of HBOS, which had a policy of playing hardball of which it appeared to be proud," said Mr Smith. Worse the bank "forced" the directors of Farepak to continue taking money from depositors - up to £10m of it - in the knowledge the company was heading for insolvency. The behaviour led Mr Smith to call on HBOS, now owned by Lloyds, to top up a £2m payment it made to the Farepak depositors" compensation fund. Sir Clive Thompson agreed: "On HBOS - the judge has his views with which I concur. He referenced a moral judgment. I personally felt that the longer that the delay [in not halting the receipt of savers" money] the greater the obligation on HBOS to accept a solvent solution. I was stunned when they withdrew support. The "verdict" by Mr Smith was damning. He blamed HBOS for the debacle. Peter Cummings, the bank's former head of commercial lending was pinpointed as the "ultimate arbiter" of many of these decisions. With the directors cleared and HBOS back in the dock, the only question is how much the bank will pay the victims.