@StaffsWCML makes a valid point about banks profiting more from liquidation than keeping a business running and paying off debt. Noel Edmonds (for it is he) has gained a LOT of compensation from Lloyds because they did it to him. The back pages of Private Eye are full of it. It's so dodgy.
Business loans don't work in the same way as domestic loans. And a mate of mine, at RBS in the height of the insanity, has told me a tale or two.
I'm no banking expert, but surely they can't recover more than they were owed, probably much less, in which case liquidation is only more profitable if you don't believe the business would ever pay it back? It doesn't sound like Thomas Cook is awash with assets to sell either. The fraud Noel Edmonds was a victim of wasn't for the benefit of HBOS other than a few employees now in prison.
And how many people would’ve lost their homes? People who were paying their mortgages.Indeed, but we had most of those issues anyway. RBS should have been left to go bust.
And how many people would’ve lost their homes? People who were paying their mortgages.
I'm no banking expert, but surely they can't recover more than they were owed, probably much less, in which case liquidation is only more profitable if you don't believe the business would ever pay it back?
It is also a little bit suspicious that the consular staff (the ones in yellow hi viz vests with British Government Official and a Union Jack on the back) were at Palma airport (as well as other airports) from early this morning.
Either the government are exceptionally good at organising things (unlikely) or they knew in advance this was going to happen and had the staff in place.
It is also a little bit suspicious that the consular staff (the ones in yellow hi viz vests with British Government Official and a Union Jack on the back) were at Palma airport (as well as other airports) from early this morning.
Either the government are exceptionally good at organising things (unlikely) or they knew in advance this was going to happen and had the staff in place.
It is also a little bit suspicious that the consular staff (the ones in yellow hi viz vests with British Government Official and a Union Jack on the back) were at Palma airport (as well as other airports) from early this morning.
Either the government are exceptionally good at organising things (unlikely) or they knew in advance this was going to happen and had the staff in place.
The problem is that Thomas Cook was burning money. Had the additional £200M been put up it is likely that they would have been back with the begging bowl again next year and if yet more money wasn't found repatriation would still have to be paid for.....They need to change the law so that the banks are the last people to get the money left over when a business is liquidated.
All to often the banks play hard ball over the funds, they often cause many a business to fail with their obscene demands charges/fees/interest rates, as a result the employees and customers should be refunded first. If a bank wants its money back it should do everything it can to help a ailing business stay afloat.
Banks are absolute scum, I understand the scummy RBS (not for the first time) are the ones refusing to refinance their debts. Its a shame we didn't let those absolute scumbags fail in 2008/09. The only duty to the government had in 2009 was to ensure savers didn't lose their money, they should have let those banks fail.
What payments have they already received in interest, fees and charges? Hazard a guess at quite significant amount over the years. I think Thomas Cook has a £600 million overdraft, imagine the charges on that! Most Business bank has high annual fees anyway. Insolvency is strangely hugely favourable for banks at present as they are preferential creditors. Whatever assets there are will be sold and the banks will be preferential creditors. In most cases they will get back at least what they lent or a high percentage of.
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The system need to change to make this less attractive to banks to take this route. Staff and customers should always be preferential creditors.
Last time credit was cheap and banks were losing money on bad loans with no contingency we ended up bailing them out and all hate them for it.They will probably get back in total more than they lent. Banks very rarely except in extreme cases of personal insolvency ever get back less than they lend. The rates they offer have a lot of contingency and profiteering built in now. Lets remember the Interest rate is 0.75%, you will struggle to find any loans for less than 4%. Banks are profiteering.
I understand Easyjet, Virgin Atlantic & British Airways will also be involved with the repatriation of holidays makers who are currently stranded abroad.
I've always found Thomas Cook to be most helpful when I've dealt with them in a professional capacity (@ Gatwick). I feel for the thousands of staff who now find themselves unemployed. Hopefully they will find alternative employment in due course.
Ben
Very good point - esp as I have just ordered one of the timetable books!Terrible news for all involved, particularly the staff who've lost jobs.
If there's one small (tiny) mercy in all of this, at least the former Thomas Cook European Rail Timetable lives on in its independent new guise.
Nice idea but.... Probably because the operators licence is with a bankrupt company, the aircraft have been or are in the process of being reclaimed by the leasors, the crew won't do it without being paid, no one (airports, fuel, insurance etc) would let those planes operate without payment up front for their services, etc etc etcWhy doesn't the CAA use the TC aircraft and crew and use them for repatriation? That would put some money into the receiver's kitty when TC is liquidated.
Nice idea but.... Probably because the operators licence is with a bankrupt company, the aircraft have been or are in the process of being reclaimed by the leasors, the crew won't do it without being paid, no one (airports, fuel, insurance etc) would let those planes operate without payment up front for their services, etc etc etc
The Thomas Cook Chief Exec was trousering in excess of £1M/year and that represented a cut - well worth it for the great job he did.... NOT!
Why doesn't the CAA use the TC aircraft and crew and use them for repatriation? That would put some money into the receiver's kitty when TC is liquidated.
I do know that Manchester Airport impounded TC aircraft as soon as they landed this morning over unpaid bills so I'd imagine it could be more complicated to sort than first appears. However.....I believe this is actually happening to some degree, Thomas Cook have for some years now leased quite a few aircraft with pilots each summer from an Estonian/Latvian company called Smartlynx. It actually looks like the CAA have taken leases and these are now being flown as Titan Airways flights, very interesting set-up. Unsure if the cabin crew are still TC employed temporarily or if Titan Airways has put in their employees.
I guess the directors and management wanted another summer of 'revenue received in advance' to get their cut of before declaring the inevitable. If this is a proper insolvency then presumably the directors will be debarred for a period, although that measure may not be particularly successful at stopping such individuals influencing the running of companies they are involved with and profiting from it.As an accountant, my first reaction was to look at the company's last published Annual Report and Accounts This report ran to about 190 pages and the Auditors Report on the accounts was the longest report that I have ever seen.
The Accounts were as at September last year and in my opinion the company was a basket case then. The net worth of the group as shown in the accounts was £291m but in reaching this figure. Intangible Assets of £3,104m are shown. So what are these Intangible Assets? Goodwill, computer software, a valuation of brands and customer relationships, in other words nothing of a saleable value. The biggest items on the liabilities side were Trade Creditors £2,314m (money due to hotels and other supplies, aviation fuel etc) and Revenue received in advance £1,390m (money paid by customers in advance of their holidays)
Did it really take until they were preparing the accounts to 30th September 2019 to realise what a mess they were in? They should have closed down in January in my opinion.
You're right there.What you use at home or what charities/voluntary organisations use is cash accounting - you either have the money to spend sat there in your account (and not offset from it due to a not yet cashed cheque) or you don't. Business accounting is much woolier than that.
There's also the question of whether bosses' actions "caused detriment to creditors or to the pension schemes".Whilst this is all desperately sad I do wonder why people continued to book holidays with Thomas Cook when it was widely known that it was in serious trouble.
The reality is travel agents are dying a slow death and Thomas Cook's ill advised acquisitions made the situation even worse.
Thomas Cook bosses' actions will face scrutiny as part of an investigation into the tour operator's collapse.
Business secretary Andrea Leadsom asked the official receiver, which oversees liquidations, to look at whether bosses' actions "caused detriment to creditors or to the pension schemes".
The request came amid criticism over executive salaries at the firm.
The government has said it will run a "shadow airline" for two weeks to repatriate 155,000 UK tourists.
Transport secretary Grant Shapps said its response to the crisis was "on track so far" and "running smoothly".
As unsecured creditors can airports ‘seize’ aircraft in such a way? In the UK at least, I’m pretty sure they have to take their place in the queue with the other creditors once the company is in administration. Obviously they can charge the administrators for any costs incurred in storing or moving the aircraft but simply taking possession seems like theft.
It is also a little bit suspicious that the consular staff (the ones in yellow hi viz vests with British Government Official and a Union Jack on the back) were at Palma airport (as well as other airports) from early this morning.
Either the government are exceptionally good at organising things (unlikely) or they knew in advance this was going to happen and had the staff in place.
Hope of a rescue deal still officially remained: banks extending credit or even the government stepping in. But despite that hope, Operation Matterhorn was launched.
Discreet feelers had been put out for weeks, discussed under the Matterhorn codename to minimise the risk of leaks, to assess the availability of potential rescue aircraft. The grounding of the 737 Max posed an additional headache: other airlines were already using airline leasing firms to fill their schedules.