Lowcost administrators still establishing cause for company’s collapse

Lowcost administrators still establishing cause for company’s collapse

Administrators appointed following the collapse of Lowcosttravelgroup last summer owing tens of millions of pounds have still to establish a cause for the company going under.

The latest progress report by administrators at Smith & Williamson says an investigation is continuing into the business and its various trading arms.

Total claims received against against lowcosttravelgroup alone amount to £98.7 million, the report reveals.

Claims against Palma-based Lowcostholidays total £82.8 million; to lowcostbeds.com of £69.8 million; lowcostaviation of £69.5 million and lowcostholidays of £70 million.

The business had 112,000 forward bookings covering about 270,000 holidaymakers at the time of the failure. Another 27,000 were abroad at the time.

The majority of customers who paid for holidays with the company by credit card have obtained refunds via the chargeback scheme covering Visa, Mastercard and American Express, according to the report.

The credit card acquirer dealing with the group has submitted a claim of £69.5 million across all five of the Lowcost companies as part of the total.

The review of the financial records is part of a probe by the administrators “to ascertain whether there were any irregular transactions or asset disposals”.

However, the report adds that investigations into the conduct of directors of the company when it failed in July 2016 are “strictly confidential” and the details cannot be disclosed.

“The joint administrators are continuing to conduct a detailed investigation into the circumstances leading to the companies’ insolvency and are reviewing possible actions that may be taken under relevant insolvency legislation to recover funds.

“Due to the complexity of the investigation and the exceptional volume of material that is subject to examination, it is anticipated to be some time before this work reaches a conclusion.”

No time frame is given but the joint administrators’ progress report, lodged with Companies House last month, adds: “The investigation remains confidential due to its sensitive nature and to avoid prejudicing any potential legal actions that the administrators may wish to take”.

The administration of all group companies has been extended by a year to July 2018.

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