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The liquidators of Lowcost Travel Group finally dissolved the company this month nine years after it ceased trading and seven since it went into liquidation.
The group, comprising companies registered in the UK and Spain, was placed in voluntary liquidation in July 2018 following an administration process that realised a mere £14,599.
The directors’ statement of affairs made at the time of the administration had recognised creditors’ claims worth more than £50 million.
However, joint liquidators Finbarr O’Connell, Colin Hardman, Henry Shinners and Lane Bednash received claims totalling almost £146 million, including a £69.5 million claim submitted by Lowcost’s former credit card acquirer Chase Paymentech and £46.5 million in intercompany claims. Lloyds Bank had submitted a claim for £564,000.
More: Lowcost administrators still establishing cause for company’s collapse [Sep 17]
The unprotected losses suffered by the card acquirer and bank will have contributed to inflating the costs of card transactions across the sector.
The liquidation resulted in no return to creditors despite the liquidators noting previously that they were pursuing “a potential action”.
The penultimate liquidators’ report last September informed creditors that “following legal advice, it has been determined it would not be cost beneficial to continue to pursue this claim”, adding: “We therefore conclude that no further investigations will be carried out in respect of the group.”
Lowcost Travel ceased trading in July 2016 with 27,000 customers abroad and 112,000 bookings after relocating from the UK to Palma in 2013 to trade outside the Atol regime. It operated a significant online agency and bed bank business with a Balearics financial guarantee worth just €1.2 million against its losses due to failure.
Company founder and chief executive Paul Evans was a vocal critic of both the Atol scheme and Abta and argued repeatedly that
the costs of Atol and of Abta bonding bore no relation to the financial risks of trading.
The company’s collapse continues to reverberate, having contributed to the failure of airport transfer provider Resorthoppa in March, which went into administration having been forced to write off £1.3 million of a £4.9 million debt owed by Lowcost.
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