Thank you!

The person who used 'in loo of' is notorious for refusing to accept any corrections of her errors.

I'm afraid that you are wrong; the British and American spellings of 'loath' and 'loathe' are identical. 'Loath' is an adjective meaning 'reluctant' or 'unwilling'; 'loathe' is a verb meaning 'despise' or 'hate intensely'. An example would be "Buffy claimed to loathe Spike, but Spike was loath to accept that she meant it".