I was hoping this article would explain why they suddenly left 600k people stranded instead of winding-down the business, but no such luck!
The CAA brings all the UK customers home as near to on schedule as possible under ATOL rules. Not sure how other nations play it out.
There was talk after Monarch's collapse a couple of years ago of permitting an exception in the insolvency rules. Specifically to allow the use of the collapsed group's aircraft and pilots. No more was every heard of it. But it was Chris "failing" Grayling as Transport Secretary, so hardly surprising the initiative failed.
Many of those people aren't really stranded, they'll have their holiday as planned and the CAA will fly them home at the end of it
As new passengers aren't starting their holidays there's a rapidly decreasing number of people to fly back
As uncertain as UK governance and Chinese international trade relations have been recently, they might be excused for thinking anything could happen in the space of a month.
Further continuing to trade after your insolvent is a form of creditor preference. In most cases your customers become just another creditor upon bankruptcy. This is of course illegal.
Some would say the people who are in a foreign country and owed a flight home should be the highest priority creditors. And if operating a flight is the most efficient way to pay that debt....
In the case of this bankruptcy preferring customers would be changing the rules after the game had started. Even if you did it a bankruptcy judge would be in his rights to claw back the cost from the consumer.
Similarly when you eat at a restaurant and pay at the end the restaurant is providing you credit. Most people don't think of it this way because the transactions go smoothly and the distinction is irrelevant. But it does affect what rights you have if something were to go wrong.
There are perhaps cases where this is true, when purchases are informed the the sketchy financial state of the company in advance and have the information necessary to assume the risk. It is ridiculous to assert that regular customers, who are purchasing an Airline ticket in the standard way that almost every, has done due diligence and should be treated the same as creditors who are given detail financial information.
> Similarly when you eat at a restaurant and pay at the end the restaurant is providing you credit. Most people don't think of it this way because the transactions go smoothly and the distinction is irrelevant. But it does affect what rights you have if something were to go wrong.
I think most places consider "dine and dash" a crime. You go to jail for theft because it is not a loan. Do you know of any jurisdictions that actually treat this as a loan?
As for dine and dash there is a difference when there is no intent to pay. If somehow between when you ordered and when it came time to pay you declared bankruptcy then the resteraunt is SOL. The short timeframe just means its very unlikely you had intent to pay.
For bankrupt companies you will see attempts to limit future expenses (i.e. cancelling employee trips etc) but the fact that there is a continual stream of transactions makes it much messier. It is fraud if the company racks up large numbers of unusual expenses just before bankruptcy is declared.
It is the reasonable expectations that differ. Customers are not expected to ask for (and will not be granted) financial information or proof of collateral. It is completely unreasonable to give those customers the same level of risk as creditors who are expected to ask for (and receive) such information.
> It is fraud if the company racks up large numbers of unusual expenses just before bankruptcy is declared.
So when a company does not currently have the financial ability to fulfill a purchase (say without obtaining a government bailout), how is it not fraud to sell a product and collect money without informing the customer of that risk?
> As for dine and dash there is a difference when there is no intent to pay.
I'd like to see you try telling your waiter "I'm a bit tight on money right now, you'll have to wait for next month for me to pay my bill." Let's see if they call the cops and you get arrested. Your argument is rather ridiculous.
In the UK if you know that are you insolvent (and knowing that you are about to be insolvent is effectively the same thing as knowing that you are insolvent) then it's illegal to trade. Using your last bit of money to do something like fly people home is illegal - it would be defrauding other creditors who have higher priority to be paid off.
Having bankruptcy at all is an attempt at making a situation full of inherent conflict more orderly and less disruptive, so it isn't obvious why one must execute its provisions in a disruptive manner.
[1] https://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_S...