Thomas Cook files for chapter 15 protection in US, says Bloomberg

Thomas Cook Group has sought to ensure its bonds are protected from US creditors by filing for Chapter 15 court protection, according to a Bloomberg report on Tuesday.

The protection, which the company filed for in the Southern District of New York, was intended to protect foreign companies from legal action stemming from US creditors while they engaged in restructuring their operations abroad.

Bloomberg said the filing could also trigger a default insurance payout on Thomas Cook's debt.

In parallel, the troubled package holiday specialist's creditors were set to vote on 27 September on whether to proceed with a UK court procedure that would allow Chinese investor Fosun to lead a rescue operation involving a cash injection of £450m.

In exchange for the rescue, Fosun will buy at least 25.0% of the equity of Thomas Cook's tour operator unit, plus 75.0% of its airline unit.

A further £450.0m provided by shareholders was expected to raise the total cash injection to £900.0m, which it was expected would be sufficient to keep the tour operator in business after reorganisation.

The company's share price had fallen by almost 90% year-to-date, with a series of profit warnings and a lack of cash resulting in the firm's demotion from the FTSE 250.

Thomas Cook shares were down 3.38% at 4.52p at 1625 BST.