US Court Move Wins Thomas Cook Time for Rescue Deal
British tour operator Thomas Cook has filed for Chapter 15 bankruptcy protection in the United States, intended at shielding the group from bondholders so that it can proceed with its rescue scheme, according to international press reports.
Tuesday’s court move gives priority to UK law over 1.15 billion euros of bonds issued under US authority, which the company wants to include in the proposed restructuring plan.
The court action has pushed back a creditors’ vote on the restructuring until next week, with the planned finalization of the deal set for October.
Thomas Cook now has one more week to clear any hurdles before the scheduled creditor hearings set for September 27 and 30.
Meanwhile, shares in the 178-year-old group have nosedived, sinking by over 90 percent in the last year. In February, the company had announced the sale of its airline, now part of the restructuring process, which requires backing from lenders holding 75 percent of the company’s debt.
Last month, the British tour operator said it had agreed to the main terms of a 450-million-pound rescue injection by Hong Kong’s Fosun Tourism with the Chinese company set to acquire at least 75 percent of Thomas Cook’s tour operations and 25 percent of its airlines.
Founded in Market Harborough in 1841, Thomas Cook serves 19 million customers a year with a staff of 22,000 in 16 countries.