Originally Posted by
diffident
That's broadly right, in basic terms. There's quite a bit more complexity in it than that in respect of the bond holders, the hedge funds and the swaps that are in play. For the swaps to pay out, Thomas Cook would need to be insolvent or deemed to have insufficient means and in a position of default (not a great deal of difference between the two, but there is a technical difference).
If tomorrows meeting deems that Thomas Cook is in that position, again as I've mentioned before, that doesn't trigger the immediate shuttering of check-in desks, but it will significantly undermine confidence within Thomas Cook's supply chain, its ability to obtain continuing lines of credit, future bookings, and the biggest of the lot, liquidity will simply vanish overnight making even relatively simple business tasks difficult.
It is at that point where the doomsday scenario would be a matter of hours, not days away.
I have a totally polarised outlook to yours. If the view is that Thomas Cook is on the verge of bankruptcy (it is) then the CDS kicks in. The bondholders get what they want and they vote in favour of the recap on the 27th. Thomas Cook emerges from court on the 30th with a huge cash injection and new owners. Its debts are gone which is good news for trade creditors, suppliers, future bookings, ATOL licences etc. All the intelligent press articles see it along those lines.
The doomsday scenario is if they emerge from tomorrow without a payout and can't leverage enough from Fosun and the supporting banks before the 27th.