Thomas Cook has filed for bankruptcy protection in the US courts to shield it from lawsuits by American creditors.
The travel group filed for a Chapter 15 court protection in the Southern District of New York on Monday, legal documents show.
Chapter 15 of US bankruptcy law protects foreign companies from lawsuits by US creditors while they reorganise their debt. Crucially, it also triggers the payout of default insurance for a group of bondholders which it is feared may block the deal.
Thomas Cook confirmed on Monday a meeting to agree the terms of its £1.1 billion rescue package with lenders has been pushed back until the end of September.
Podcast: Thomas Cook rescue deal
A vote was due to take place this Wednesday but the travel giant has secured more time to negotiate with a group of bondholders which is feared might block the deal.
The travel agent’s creditors are now set to take key votes on September 27 and 30.
Under the proposed terms, Fosun, which owns 18% of Thomas Cook, will control 75% of the company’s tour operating business and up to 25% of its airline in exchange for a £450 million capital injection.
Debt holders and lending banks have agreed to put up the remaining £450 million in exchange for control of Thomas Cook’s airline and up to 25% of the tour operator.