The£1 million is money accumulated in the interim between Farepak's collapse and the appointment of administrators.
The judge, Mr Justice Mann, said there was not enough evidence to justify immediate payment. He said: 'The [money] must be disposed of properly and on the basis of law, not purely on the basis of sympathy and Christmas.' He added that payment may be authorised at a later date, and the issue is going back to court today
Several hundred Farepak customers had hoped to share the cash in time for Christmas. An estimated 150,000 customers lost about£40 million collectively, when the Christmas hamper firm collapsed.
Last week, dozens of Farepak customers also demonstrated outside HBoS's headquarters in Edinburgh. The bank has been under fire for its role in the disaster: HBoS financed Farepak's parent company EHR and recovered most of its£28 million loan when the company went into administration.
However, the bank has claimed that a lack of gratitude from campaigners may have deterred donations to the Farepak Response Fund - a charity set up to help customers who lost millions after the company's collapse.
In a letter to the campaign group, Unfairpak Forum, HBoS said: 'We believe your very negative stance may have discouraged other corporate contributors. Perhaps if you had issued a more gracious response following our donation [£2 million], the fund would be significantly higher than it was when it closed.'
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