Numerous parties owed money by the group are understood to have consulted insolvency lawyers. But the two competing rescue proposals have not yet been ruled out.
The proposal put forward by private equity firm Terra Firma and Saudi billionaire Prince Alwaleed bin Talal to inject £150 million of fresh equity and swap some of Le Meridien's £740m debt for equity is set for a decision this week.
However, a rival proposal by Lehman brothers was still alive despite reports that it had been ruled out last week. The position of Royal Bank of Scotland (RBS), which owns the hotel group's properties and is owed £16m in rent, remains key to future discussions.
The Lehman deal proposes that RBS manage the UK properties, while Lehman's and the Pritzker family's Hyatt Hotel group manage the hotels outside the UK.
The Terra Firma/Alwaleed proposal is offering part of the £150m equity injection to RBS as payment of rent. But the bank cannot accept the offer or put Le Meridien into receivership without the co-operation of the senior debt holders, a syndicate of 15 lenders led by Merrill Lynch. The syndicate wants more details of the Terra Firma offer before making any decision.