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Thomas Cook-2

Old 18th Sep 2019, 13:03
  #681 (permalink)  
 
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Originally Posted by Jonty View Post


Are you sure your not confusing this with Chapter 11 bankruptcy protection?

All Chapter 15 does is say that this company is being restructured under different law in a different country and it protects Thomas cook from legal action in the US, saying all US investors have to take legal action in the UK. It defines the jurisdiction applicable to the restructuring. It’s got nothing to do with people being turned away at check in.

https://www.uscourts.gov/services-fo...kruptcy-basics
I'm definitely not confusing the differences between the different chapters of bankruptcy law in the US system, specifically Title 11, in which Chapter 11 and Chapter 15 both reside.

The Chapter 15 protection is for companies registered outside of the United States gaining protection from creditors within the United States exclusively. In this case it is being used as an instrument to attempt to block bondholders and potentially the hedge fund managers.

Cue tomorrow, where those said bondholders and hedge fund managers will be asking whether the company is effectively insolvent or not. If not what is its liquidity position.

The point where people get turned away from check-in desks wouldn't happen through these hearings directly. However, if the hearings tomorrow depict a perilous state of affairs for the company, the CAA will be taking note pending their decision on renewing the ATOL licence, as will suppliers hoping to get paid soon, and shareholders considering whether to cut-and-run on their positions.

FYI - a UK, or for that matter, EU registered company cannot file for Chapter 11 bankruptcy protection in the US. In the UK, Chapter 11 is called Administration.
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Old 18th Sep 2019, 13:15
  #682 (permalink)  
 
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Originally Posted by diffident View Post
I'm definitely not confusing the differences between the different chapters of bankruptcy law in the US system, specifically Title 11, in which Chapter 11 and Chapter 15 both reside.

The Chapter 15 protection is for companies registered outside of the United States gaining protection from creditors within the United States exclusively. In this case it is being used as an instrument to attempt to block bondholders and potentially the hedge fund managers.

Cue tomorrow, where those said bondholders and hedge fund managers will be asking whether the company is effectively insolvent or not. If not what is its liquidity position.

The point where people get turned away from check-in desks wouldn't happen through these hearings directly. However, if the hearings tomorrow depict a perilous state of affairs for the company, the CAA will be taking note pending their decision on renewing the ATOL licence, as will suppliers hoping to get paid soon, and shareholders considering whether to cut-and-run on their positions.

FYI - a UK, or for that matter, EU registered company cannot file for Chapter 11 bankruptcy protection in the US. In the UK, Chapter 11 is called Administration.
There is no doubt that Thomas Cook is already on death row. Without the refinancing deal it is all over. We don't need tomorrow's hearing to learn that. The Chapter 15 move is designed to trigger the CDS which then satisfies the bondholders demands and the recap deal gets the green light. Should they elect not to trigger CDS, then it's more horse trading with Fosun and the supporting banks. The Thomas Cook board are little more than spectators at this stage in the game.

The ATOL licence will not get renewed unless the recap deal goes through. The shares will be worthless by the end of the month. That's the whole point of the debt for equity swap.
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Old 18th Sep 2019, 13:22
  #683 (permalink)  
 
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That was pretty much my take on it.

This isn’t bring used to block bond holders, bond holders will get a vote on the recapitalisation at a meeting next week.
This is being used to see if some hedge funds, who have taken out CDS on Thomas cook get paid or not. If they do they have said they will vote for the recapitalisation next week. If they don't get paid and they hold more than 25% of Thomas Cooks debt then they can use the threat of derailing the deal as leverage. Or just vote against the deal and the company goes down.

That was my understanding of the situation anyway.
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Old 18th Sep 2019, 13:30
  #684 (permalink)  
 
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There is a lot of ifs and buts. What do people honestly believe? Will Thomas Cook likely be solvent after the 01st October?
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Old 18th Sep 2019, 13:31
  #685 (permalink)  
 
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Originally Posted by Jonty View Post
That was pretty much my take on it.

This isnít bring used to block bond holders, bond holders will get a vote on the recapitalisation at a meeting next week.
This is being used to see if some hedge funds, who have taken out CDS on Thomas cook get paid or not. If they do they have said they will vote for the recapitalisation next week. If they don't get paid and they hold more than 25% of Thomas Cooks debt then they can use the threat of derailing the deal as leverage. Or just vote against the deal and the company goes down.

That was my understanding of the situation anyway.
Mine too.

All the talk about the ATOL renewal and AOC's is a sideshow. Without the recap sanctioned the lights go out.
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Old 18th Sep 2019, 13:33
  #686 (permalink)  
 
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Originally Posted by JonnyH View Post
There is a lot of ifs and buts. What do people honestly believe? Will Thomas Cook likely be solvent after the 01st October?
I'm not clear as to whether, if the worst happens this just effects Thomas Cook's UK business, or does the whole European house of cards collapse?

Hopefully neither - fingers crossed.
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Old 18th Sep 2019, 13:42
  #687 (permalink)  
 
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Originally Posted by Jonty View Post
That was pretty much my take on it.

This isnít bring used to block bond holders, bond holders will get a vote on the recapitalisation at a meeting next week.
This is being used to see if some hedge funds, who have taken out CDS on Thomas cook get paid or not. If they do they have said they will vote for the recapitalisation next week. If they don't get paid and they hold more than 25% of Thomas Cooks debt then they can use the threat of derailing the deal as leverage. Or just vote against the deal and the company goes down.

That was my understanding of the situation anyway.
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.
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Old 18th Sep 2019, 14:02
  #688 (permalink)  
 
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Originally Posted by diffident View Post
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.

Last edited by 763 jock; 18th Sep 2019 at 14:23.
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Old 18th Sep 2019, 14:33
  #689 (permalink)  
 
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Originally Posted by 763 jock View Post
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.
I’m with you.

If diffident is correct (and I don’t think he/she is) then why are they bothering. They are toast either way, they might as well pack up and go home now.

http://www.travelweekly.co.uk/articl...-deal-positive

Last edited by Jonty; 18th Sep 2019 at 14:34. Reason: link added
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Old 18th Sep 2019, 14:35
  #690 (permalink)  
 
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Originally Posted by 763 jock View Post
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 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.
Yep, this is where the viewpoints diverge. The CDS won't kick in unless the company is in default. Being "on the verge" is not enough, it is a matter of fact. If the company is determined by the panel tomorrow to be "in default" (and/or insolvent) thus triggering the CDS's - the bondholders will be happy, but the headlines will be that Thomas Cook is insolvent (regardless if at that exact moment it is or not), because it has triggered a default swap. Then liquidity dries up, credit is withdrawn and suppliers stop supplying on fear of not being paid. It's the old economic domino effect that has done for so many otherwise well built and stable businesses over the years.

Thomas Cook could publish a bank statement showing cash on hand in the financial times, but the confidence will already be broken.

My personal view? I've seen this a good number of times with companies in a range of different industries. Frankly, the future of a business should not be determined by a bunch of folks in suits sat in a skyscraper in New York making decisions based on investment performance and what's in it for them. It is not uncommon for a sound business to have short-term cash flow issues, and be pushed over the edge in these situations by these institutional investors.

Its all so very brutal.
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Old 18th Sep 2019, 14:46
  #691 (permalink)  
 
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Originally Posted by diffident View Post
Yep, this is where the viewpoints diverge. The CDS won't kick in unless the company is in default. Being "on the verge" is not enough, it is a matter of fact. If the company is determined by the panel tomorrow to be "in default" (and/or insolvent) thus triggering the CDS's - the bondholders will be happy, but the headlines will be that Thomas Cook is insolvent (regardless if at that exact moment it is or not), because it has triggered a default swap. Then liquidity dries up, credit is withdrawn and suppliers stop supplying on fear of not being paid. It's the old economic domino effect that has done for so many otherwise well built and stable businesses over the years.

Thomas Cook could publish a bank statement showing cash on hand in the financial times, but the confidence will already be broken.

My personal view? I've seen this a good number of times with companies in a range of different industries. Frankly, the future of a business should not be determined by a bunch of folks in suits sat in a skyscraper in New York making decisions based on investment performance and what's in it for them. It is not uncommon for a sound business to have short-term cash flow issues, and be pushed over the edge in these situations by these institutional investors.

Its all so very brutal.
There is one huge difference here. Fosun and the banks have already agreed to inject £1.1 billion as part of the deal. I would suggest that the headlines would be positive. Let's wait and see.
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Old 18th Sep 2019, 20:50
  #692 (permalink)  
 
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In lighter news......A lot of cabin crew have been rostered with conversion training onto the Condor(German) fleet. Perhaps one or two coming over for the winter? Or us being shipped over maybe.
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Old 18th Sep 2019, 21:10
  #693 (permalink)  
 
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Originally Posted by USERNAME_ View Post
In lighter news......A lot of cabin crew have been rostered with conversion training onto the Condor(German) fleet. Perhaps one or two coming over for the winter? Or us being shipped over maybe.
Two D- Reg A321s are coming over
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Old 18th Sep 2019, 21:29
  #694 (permalink)  
 
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Originally Posted by LiamNCL View Post
Two D- Reg A321s are coming over
Whats the difference between condor and tcx 321's. the order was placed at the same time surely they'd be identical?
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Old 18th Sep 2019, 21:31
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Originally Posted by louelle100 View Post
Whats the difference between condor and tcx 321's. the order was placed at the same time surely they'd be identical?
Not a whole lot different, but a different airline so a conversion is necessary, much like how many of us have done conversions for Thomas Cook Balearics, Smartlynx, Avion etc. Also some of the Condor fleet are ex-WOW & Germania so they have additional differences.
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Old 18th Sep 2019, 21:42
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Originally Posted by JonnyH View Post
There is a lot of ifs and buts. What do people honestly believe? Will Thomas Cook likely be solvent after the 01st October?

Yes they will if halfwits such as yourself don’t desist from constant doom mongering , It’s disgraceful the way people on here are spreading rumours and half truths ,Don’t you realise the press are all over these forums ???

TC are not going bust end of story.

Last edited by Doc Q; 18th Sep 2019 at 22:17.
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Old 18th Sep 2019, 21:48
  #697 (permalink)  
 
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I am somewhat dubious that the Chapter 15 bankruptcy filing in the USA will be sufficient for the CDDC to decide that a credit event has occurred and thus rule that credit default swaps owned by the hedge funds (who also own bonds) will be triggered. A court filing in Europe would be rather more convincing of a genuine bankruptcy credit event. The CDDC got a bad rap for the way it handled Sears in 2018 - they will presumably want to show greater transparency to the financial markets this time round - although sadly they won't care a bit about the 20,000 TC employees whose jobs are on the line

Thomas Cook has relatively few assets in the USA - all traffic there is inbound tourism, and its hotels are in a mix of Africa, Asia and Europe. Furthermore, the filing with the court makes no mention of the word 'insolvent'. Thomas Cook does not have a registered office in the USA. I think the CDDC might view this as a sham bankruptcy and thus decide that the CDS protection should *not* be triggered which would then make the hedge funds holding the bonds potentially inclined to vote against any restructuring unless Fosun sweetend the deal for the bond holders. 5 year CDS rates on Thomas Cook have not substantially changed in the last 48 hours based on quotes on Bloomberg - although bid/ask spreads are admittedly very wide

I am inclined to think that the survival of TC beyond 1st October will be decided substantially by last minute horse-trading that goes on during the very last few days of September
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Old 19th Sep 2019, 08:52
  #698 (permalink)  
 
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Originally Posted by Doc Q View Post



Yes they will if halfwits such as yourself donít desist from constant doom mongering , Itís disgraceful the way people on here are spreading rumours and half truths ,Donít you realise the press are all over these forums ???

TC are not going bust end of story.
Halfwits?

I think youíll find youíre the half wit you moron. There is as much chance of Thomas Cook going bust as there is of them surviving.

Are you a bond holder? Because you seem incredibly certain this deal is going to through.

Probably good to keep your trap shut, halfwit, until after this month to ensure you donít end up with egg on your face.
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Old 19th Sep 2019, 09:06
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Let’s keep it Friendly please, we are all entitled to our own opinion and views.

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Old 19th Sep 2019, 11:45
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Originally Posted by davidjohnson6 View Post
I am somewhat dubious that the Chapter 15 bankruptcy filing in the USA will be sufficient for the CDDC to decide that a credit event has occurred and thus rule that credit default swaps owned by the hedge funds (who also own bonds) will be triggered. A court filing in Europe would be rather more convincing of a genuine bankruptcy credit event. The CDDC got a bad rap for the way it handled Sears in 2018 - they will presumably want to show greater transparency to the financial markets this time round - although sadly they won't care a bit about the 20,000 TC employees whose jobs are on the line

Thomas Cook has relatively few assets in the USA - all traffic there is inbound tourism, and its hotels are in a mix of Africa, Asia and Europe. Furthermore, the filing with the court makes no mention of the word 'insolvent'. Thomas Cook does not have a registered office in the USA. I think the CDDC might view this as a sham bankruptcy and thus decide that the CDS protection should *not* be triggered which would then make the hedge funds holding the bonds potentially inclined to vote against any restructuring unless Fosun sweetend the deal for the bond holders. 5 year CDS rates on Thomas Cook have not substantially changed in the last 48 hours based on quotes on Bloomberg - although bid/ask spreads are admittedly very wide

I am inclined to think that the survival of TC beyond 1st October will be decided substantially by last minute horse-trading that goes on during the very last few days of September
Interesting. TC are in a weird place were being declared insolvent in one area but not another is to their benefit. I know they will be keeping the CAA abreast of all the ups and downs of the proceedings. However, since the ATOL license expires at midnight 30/09-01/10 there is a danger that things may slip too late for all the bits to line-up. Further, the CAA will be none to happy about the expenditure of preparing for a shut-down, which will rise rapidly as 01/10 approaches. I seem to recall the Monarch preparations in 2016 costing millions. Will definitely stay tuned.

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