In 1969, Bob Johnson was appointed managing director of the small Christmas club with 500 agents operating from a butcher's shop in Peckham.
After a series of profit warnings starting in June 2006, Farepak ceased trading on 13 October 2006, leaving tens of thousands of people out of pocket for Christmas 2006.
[2] The administrators explained that Farepak's collapse was triggered by the fact £33m it lent to its parent company EHR was not paid back.
It emerged during the Insolvency Service hearing that the money paid to Farepak by shoppers saving for Christmas was largely not held in trust and was generally available for the use of Farepak and its parent company, but held under the security net of HBOS, the group's bank.
In December 2006, Myleene Klass used eBay to auction off the bikini which she wore during her appearance on TV show I'm a Celebrity... Get Me Out of Here!, raising £7,000 for the Farepak victims.
Two of the directors, Joanne Ponting and Stephen Hicks, gave undertakings to the Insolvency Service to settle the claims.
In June 2012 the disqualification proceedings were withdrawn by the Insolvency Service after it emerged that "not only did the directors do nothing wrong, they made genuine strenuous efforts to save the group and the depositors" and the cause of the losses to Farepak's customers was the behaviour of its bank, HBOS.
Mr Justice Peter Smith, the trial judge, made a statement after the case collapsed in order to explain the reasons.