A meeting of creditors – those owed money – is held to explain why a business has failed, and often to vote on the next proposed steps. “Proposals for creditors”, which are usually sent out around the same time, give details of who the creditors are, the financial position of the companies concerned and an estimate of the costs involved.

Under UK law, administrators must hold the creditors meeting and release the proposals for creditors within eight weeks of being appointed. One administrator of Lowcosttravelgroup told TTG that due to the huge number of people expected to submit claims, it would likely take close to the maximum time to compile the report.

Henry Shinners of accountancy firm Smith & Williamson was appointed as one of the administrators for Lowcost’s UK companies on July 15 and Spanish company Lowcostholidays Spain SL on July 21. Swiss company Lowcostbeds. com AG is expected to enter an insolvency process in the near future.

Shinners told TTG: “We expect to send out the creditors proposals in mid-September, and that a creditors meeting will take place around the same time. There is uncertainty at the moment as to who the creditors will be because not every customer will be a creditor. They may be able to claim against a credit card for example, in which case the credit card issuer might be a creditor in the customer’s stead. This case is different to the majority simply because of the number of people affected. There are potentially a very large number of creditors.”

The meeting is expected to take place in the UK. Shinners said the administrators’ focus to date had been on assisting affected customers as much as possible, winding down the affairs of the group “in as orderly a fashion as possible” and securing the records for future analysis.

Part of the standard procedure when a company goes into insolvency is also to investigate the conduct of the company and its directors.

Asked whether a criminal investigation could occur, Shinners said: “That would only be likely if there was evidence of a criminal offence, and we have not seen evidence of anything criminal at this stage.”

Asked whether operating losses could lead to a business suffering cash shortfalls and ultimately becoming insolvent, Shinners agreed. “If a company was operating at a loss for a long time, then that’s something the administrators would ask the directors about,” he added.

Shinners said there was no update on a potential deficiency figure of £75 million, suggested by fellow administrator Finbarr O’Connell, but said the figure would be considered in their proposals.