Collapsed compensation firm owed £2.5m

Flight Reclaim, which helped people to claim compensation for delayed, cancelled or overbooked flights, has been permanently grounded by the coronavirus pandemic.

The Didsbury-based business owed nearly £2.5m when it entered administration in June, new documents have revealed.

Most staff were initially kept on by administrators to deal with existing claims, but all 13 employees have now been made redundant.

Joint administrators Glyn Mummery and Julie Humphrey, from business advisory firm FRP, have estimated creditors will miss out on more than £2m that they are owed.

Mummery said: “The issues facing the travel sector unfortunately meant the business was unable to continue to trade.”

Flight Reclaim worked on a no win, no fee basis to secure up to £510 compensation per passenger if customers had suffered disruption while flying.

But it had faced a number of challenges in recent months after the coronavirus pandemic put a stop to international travel, which resulted in a “significant drop” in the number of new claims.

There were 4,800 consumer creditors who were owed an average of £515.