City firms were today grappling with a host of legal issues following the collapse of holiday company Thomas Cook last night.

A cross-border team from Reed Smith is advising the Civil Aviation Authority (CAA) on the tour operator’s insolvency. Working with the CAA’s in-house team, the firm has advised on restructuring proposals, licensing and regulatory issues, insolvency law and contingency planning for the repatriation of customers.

Ashurst is advising the Official Receiver, consulting firm AlixPartners and KPMG, who have been appointed as special managers in respect of certain Thomas Cook entities. 

The Ashurst team is led by partners Giles Boothman, Olga Galazoula and Lynn Dunne and will focus on both corporate and employment matters.

Meanwhile, Latham & Watkins was also thrust into the spotlight on Sunday as the venue for last-minute talks to save the business. In a clip widely shared on social media, Thomas Cook chief executive Peter Fankhauser was filmed exiting the firm via its loading bay. It is unclear what role the firm was instructed to play during the negotiations.

Reflecting on the issues that still need to be resolved, Rebecca Thornley-Gibson, partner at City firm DMH Stallard, said: ‘There are, and will continue to be, multiple impacts from the loss of 9,000 jobs in the UK in Thomas Cook. The impact on a short-term basis will be mitigated by the rights of employees to claim payments including arrears of pay, statutory redundancy, holiday and notice payments from the Insolvency Service.

‘If these are paid promptly employees will at least have some time to catch their financial breath as they seek alternative roles elsewhere.’

Meanwhile thousands of passengers who have had flights cancelled face a difficult task to secure refunds and find alternative travel at the same price.

Coby Benson, flight delay compensation solicitor at specialist Bott and Co, said Thomas Cook customers who paid with a credit card may be able to recover their money, in full, under the Consumer Credit Act using Section 75.

For flights which cost less than £100 or were paid for using a debit card, the Visa/MasterCard/Amex ‘chargeback’ system can be used to recover the money paid. Anyone with flights as part of a package holiday can contact the travel firm they booked with and to check if their holiday was ATOL protected. Their travel firm would then be responsible for arranging alternative flights or providing a full refund.

Image credit: Joe Giddens/PA Wire/PA Images