Documents relating to the collapse of Allbury Travel Group have revealed it failed with £13 million of loans linked to credit card processing firm E-Clear and its chief executive Elias Elia.
The administrators’ report shows the eastern Mediterannean specialist had received loans of £1.7 million from Allbury Limited/E-Clear and £11.6 million from Allbury Ltd, the holding company registered in the British Virgin Islands and controlled by Elia, during 2008 and 2009.
These loans enabled Allbury Travel Group to continue trading, despite it making losses during 2008 and 2009.
According to the administrator, Alexander Lawson Jacobs, the company suffered from a “lack of support” from travel agents for early bookings and the failure of hoteliers to offer competitive rates prior to its failure in December.
A further loan from Allbury Ltd was expected in December, but it never materialised and the company surrendered its ATOL licence and entered administration.
E-Clear, the controversial credit-card processing company, was last month itself forced into administration after PricewaterhouseCoopers, the administrator of Scottish operator Flyglobespan, took High Court action over £35 million it claimed was owed to the operator.
Accountancy firm BDO is still working to find what has been estimated was £100 million of clients’ money E-Clear had withheld and is due to report to creditors at the end of March.
The Alexander Lawson Jacobs documents also indicated a further £3.4 million loan came from Libra Holidays and £500,000 from former chief executive of Libra Holidays Group Andreas Drakou. In total, Allbury Travel Group had £52 million of debts.
These loans were listed as “subordinated loans”, which means they take lower priority than other creditors in the administration process.
They are usually made by parent companies or major shareholders, rather than outsiders, as they have a higher element of risk. Several large travel agencies were also listed as creditors, including The Co-operative Travel, Hays Travel, Travel Counsellors and Global Travel Group.
Alexander Lawson Jacobs has scheduled a creditors’ meeting for February 24. It is thought few people will attend due to the lack of funds available.
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