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Majorcan companies facing insolvency

Thomas Cook collapse in Majorca

The collapse of Thomas Cook has had an impact on many of its suppliers. | Reuters

Majorca Daily Bulletin reporterPalma07/10/2019 12:12
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The collapse of Thomas Cook has had an impact on a variety of companies which now face the real possibility of going under. These companies are Thomas Cook suppliers and they include the likes of architects and building firms, for which the tour operator was an important client.

In at least one case, a company filed for pre-insolvency on the same day that creditors were calling for it to be placed in administration for insolvency. Pre-insolvency provides some protection and the opportunity to negotiate with creditors and seek new financing. A company is given four months, extendable by two, to try and come to arrangements. The pre-insolvency situation can be lifted at any time during this period, if there have been satisfactory negotiations.

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Five Thomas Cook subsidiaries based either in the Balearics or the Canaries are among the companies which are in pre-insolvency. The most recent to file for this is the Thomas Cook Airlines Balearics, which was only founded in October 2017 and before the tour operator's strategy with airlines was reversed. The decision to try and sell off the airlines was brought about through necessity - the elimination of some 1,000 million euros debt.

A total of 3,400 employees are affected, including those at In Destination Incoming, the main Thomas Cook company in the Balearics and the only one to have so far filed for insolvency. PriceWaterhouseCoopers has been appointed as administrator.

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