Your problem is very strange. Some people are experiencing issues at upgrade from 1.1.6 to 1.2.x but languages are not lost even if the database upgrade process does not run at all.
Fatal error: Cannot use object of type WP_Error as array in /public_html/wptest/wp-content/plugins/polylang/admin/admin-model.php on line 47
This error cannot appear before 1.2. Did you lost your languages before you upgraded or after?