Unofficially perhaps but officially the plan was to properly finance FlyBE and run it as a going concern...that was justification to burn the shareholders and protect other stakeholders.
Stakeholders usually include the public, government, business who do business with it.
The public in the regions now have had the possibility of connecting flights through LHR removed.
It is reported in the press that their creditors in the Airports aren't being paid
The government is foregoing/stalling APD and is being coerced to provide a loan on commercial terms with no assets on which the loan can be secured.