On 23 September 2019, the English High Court, sitting at the unprecedented time of 1 a.m., made orders immediately winding up the Thomas Cook travel group. In a high profile decision which will be of interest to Cayman insolvency practitioners, the English High Court were asked by the applicants (the directors of the company) to make urgent orders to place the group into liquidation and to dispense with the normal requirement of publishing notices regarding the application.
The application was made following the exhaustion of all options to salvage the Group by the directors. The Group had unsecured indebtedness of approximately £1.9 billion and trading without recapitalization, attempting to negotiate recapitalization or administration were held not be viable alternatives to salvage the business.
In normal circumstances, a petitioner must give notice of the petition to wind up. However, in the UK, there is express power given to the court to dispense with this requirement. With some 145,000 Thomas Cook customers abroad and in need of repatriation to the UK, the High Court was satisfied that the urgent circumstances demanded that notice should be dispensed with so that the liquidators could take steps forthwith.
The Court held further that giving notice in this instance would serve no purpose as it was “impossible to see what arguable grounds” any creditors could advance to oppose the petition given the fact that they had had “ample opportunity” to consider whether or not to provide financial support to the Group. This was a petition issued the directors of the Group without opposition from the Group.
In reaching his decision, Mr Justice Smith noted that it was “relatively unusual” for a winding up order to made immediately but the unique and perilous position of the Thomas Cook Group meant that it was the proper course. He cited the decisions previously made by Morgan J in Re Carillion plc and Snowden J in Re British Steel Ltd as being persuasive.
The decision illustrates that where exceptionally urgent circumstances exist, winding up orders can be made without the need for publishing notices which may cause delay detrimental to the company and innocent 3rd parties.