work around is starting timextender with run as administrator but it is strange that that should be necessary
 

@Roy V can you please check that the users have access to the following folder?

 Also please ask the users if they are able to open the .txt file specified in the error message

yes they can 
if I delete the authenticationsettings file and a colleague logs in then they create the file  and then I get the error message
 

 Somehow it locks the execution of TimeXtender to the user who first opens it and who creates that AuthenticationSettings file.
In the previous version this file doesnot exist.

I gave all users of the vm full control over the AuthenticationSettings file , that solved the issue.

Thanks for pointing in the right direction Christian