Thomas Cook administrators notch up £11 million fees

Two firms employed by administrators of Thomas Cook have notched up fees of £11 million between them for the first three weeks alone after the holiday firm failed, MPs have been told.

Wednesday, 23rd October 2019, 3:03 pm
Thomas Cook, Lynchwood. EMN-190924-125940009

Dean Beale, chief executive of the Insolvency Service, told MPs on the Business, Energy and Industrial Strategy committee that so-called special managers working on behalf of the liquidators - KPMG and AlixPartners - racked up the fees.

Mr Beale added that there were as many as 300 people from the two firms working on the liquidation at one stage immediately after Thomas Cook, who had their headquarters in Peterborough collapsed.

More than 1,000 people lost their jobs when the firm collapsed.

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MPs heard how Hays Travel paid £6 million to buy the 555 Thomas Cook shops.

MP Ian Liddell-Grainger said: “They bought 555 shops - £6 million is not a lot of money.”

Mr Beale also told the Commons committee the Insolvency Service - as official receiver of Thomas Cook - and its legal advisers are looking into whether there is “any scope” for bonuses paid to bosses of the holiday firm to be clawed back.

He said the contracts agreed with directors are being examined to see if the contractual arrangements around bonuses have been met.

Manny Fontenla-Novoa, former chief executive of Thomas Cook, said he never thought its debt pile was unmanageable during his leadership until 2011.

He also defended the merger of Thomas Cook with Co-op Travel and other acquisitions during his tenure despite the weight of debts.

Last week, Peter Fankhauser, Thomas Cook’s chief when it collapsed last month, said the burden of debts was a key factor for the travel firm’s collapse.

Mr Fontenla-Novoa said the latter chiefs should have looked at disposing assets earlier if they believed they were unable to service that debt.

Harriet Green, chief executive of Thomas Cook from 2012 to 2014, said there “clearly should have been” a different approach to goodwill at the company.

She said there was overall goodwill of £2.6 billion when she started and this was “slightly less” when she left the business.

She said discussion over possible reductions of goodwill were “intense” during her tenure, but goodwill remained over £1 billion until 2019 when this was rapidly written down.