Am I right in reading that and thinking the new Flybe basically wanted the slots and the operating license without the legacy liabilities (ie £500m of debt) from the old company? Isn't there a danger if that was approved it would have have left a very nasty precedent, i.e. If you have a bit of debt just close the company and start a new legal entity with no debt but transfer the OL and the valuable assets.
Also, legally, wouldn't ex employees taken on then had a very good legal argument regarding TUPE? And I'm not sure the new Flybe would have necessarily wanted to inherit the employment rights of the old airline.