The Travel Club of Upminster and its subsidiary Austria Travel have gone into administration.
Travel Weekly reported exclusively last week that the company, of which Tony Freudmann is a director, had failed to pay at least 20 hotels and apartments in Majorca and had approached administrators Shipleys for financial advice.
Shipleys was officially appointed as adminstrators yesterday (Sepember 27). The Birmingham based businesses provided hotel and apartment accommodation primarily in Majorca and Portugal.
A statement from the administrator said: "The companies are unable to continue trading as a result of an inability to meet guaranteed payments to key overseas accommodation suppliers."
A notice of intention to appoint adminstrators was filed in court on September 14 for Travel Club and on September 24 for Austria Travel Limited.
The statement said: "This action was taken to try and protect the businesses to allow time to maximise the realisation of the assets of the companies, notably their goodwill.
"In this regard, specialist travel accountants Messrs Ellman Wall were instructed to value the businesses and seek expressions of interest from within the industry."
No-one has come forward to purchase the assets so far.
Customers with future bookings will be able to file claims to the administrators and may be able to recover their funds if they have paid by credit card. The company was not a member of Abta and did not hold an Atol.
Meanwhile, ITT chairman and managing director Steven Freudmann, the brother of Travel Club of Upminster director Tony, has moved to clarify his relationship with the firm.
He said the Travel Club of Upminster was not owned by Alpha Prospects, of which Steven Freudmann remains a director.
He said: “Alpha Prospects doesn’t own the Travel Club of Upminster. We had an option to buy it but that option was never taken up.
"We never did have any ownership or management of The Travel Club of Upminster. It is privately-owned and run by my brother and a couple of other directors. It has nothing to do with Alpha.”
Freudmann did confirm, however, that Travel Club of Upminster had bought the pre-pack assets of Unpackaged Holidays, a company which was owned by Alpha Prospects before it went into administration last year.
Freudmann confirmed that Alpha now had no travel businesses in its portfolio and was in technical terms “a cash shell”. He added: “We are looking for acquisitions.”
He added: “I was not a director of Unpackaged when it failed and I am not a director of The Travel Club of Upminster.”