Thomas Cook, the world’s oldest travel agent, is now in the hands of liquidators, who will assess what assets the company has that can be sold off.
But what happens to companies when they are put into liquidation?
Thomas Cook is being dealt with by Insolvency Service liquidators who, alongside experts from KPMG and AlixPartners, will see if any money can be found to pay creditors.
The liquidators are dealing with more than 25 companies, including Thomas Cook Airlines Ltd and Thomas Cook Money Ltd, and will be looking for money to hand back to employees, and creditors who have not been paid for their good or services.
The travel agent had about 550 high street locations across the UK, however, it leased its planes, rented its shops and acted as a broker with third-party hotels and cruise ships, meaning it has minimal assets.
Landlords will take back control of properties and attempt to find new occupants – not an easy task in the current climate – and the plane owners will take back their property.
Thomas Cook may have some money tied up in hotels it owns, as it planned to open 20 own-brand hotels in 2019 in locations including Spain and Egypt, and other office properties could also have some value.
One insolvency expert questioned why the firm was forced into compulsory liquidation.
Tim Symes, a partner at law firm DMH Stallard and an insolvency specialist, said: “The last time compulsory liquidation was used in such a high-profile case was Carillion.
“It has been suggested, in the case of Carillion, that compulsory liquidation was chosen over administration due to the dearth of real assets.
“It remains to be seen precisely why compulsory liquidation was chosen over administration for Thomas Cook.
“No doubt, with the benefit of intense media coverage and scrutiny in the coming weeks and months, together with the substantial investigations to be carried out by the official receiver assisted by special managers, the full story on the sad demise of this well-loved travel company will become even clearer.”