Originally Posted by
virginblue
I don't think it is not so much about being clever, but about one's legal position. Because of the problems TC was facing, Condor most likely terminated the profit transfer agreement a while ago with cause as TC was no longer in a position to honour its part of the agreement.
Profit transfer is irrelevant, it is the cash which is key here. A subsidary can refuse to transfer the cash / delay or do everything it can to ensure it is kept within its business. In doing this of course they are breaching ownership rules but when it comes to this it really is about survival. Holding £1 million in cash may mean the difference in you being able to open the doors on a monday and not. If company goes bust at the weekend the cash stays in subsidaries account and while still may owe it you can take a lot longer to pay while surviving. Basically if making money in all likelihood someone will buy it quickly.
The time Lehman Brothers went bust the corporate treasury team were sucking in all the money from every country in the days before it happened.