Former directors of Thomas Cook, one of Britain's biggest travel companies, are to be formally cleared of wrongdoing by the government's bankruptcy watchdog after a probe lasting more than two years.
Sky News has learnt that the Insolvency Service has concluded its investigation into the collapse of Thomas Cook, which was forced into compulsory liquidation in September 2019 after the failure of last-ditch rescue talks.
Full details of the Insolvency Service's conclusions were unclear on Wednesday, but one source close to the process said it had decided there was no basis for further action against the tour operator's bosses.
The development comes just under nine months before a statutory three-year deadline for the watchdog to complete its inquiry.
In a letter to the Insolvency Service on the day of Thomas Cook's collapse, Andrea Leadsom, the then business secretary, urged it to treat the inquiry as a priority, "given the significance of this case and its implications for thousands of customers and employees"
"I ask that the investigation by the Official Receiver looks, not only at the conduct of directors immediately prior to and at insolvency, but also at whether any action by directors has caused detriment to creditors or to the pension schemes," she wrote.
It was unclear on Wednesday whether the inquiry's scrutiny of Thomas Cook's former directors, which examined issues such as whether the company had traded while insolvent or issued misleading financial statements, had raised any meaningful concerns.
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The collapse of Thomas Cook followed months of frantic talks aimed at raising hundreds of millions of pounds of funding to keep it afloat.
Its liquidation triggered thousands of job losses and a huge repatriation effort led by the Civil Aviation Authority which was the largest of its kind in peacetime.
The anticipated exoneration of the travel agent's board members will come as a relief to the likes of Peter Fankhauser, Thomas Cook's chief executive at the time of its collapse.
Other former board members included Warren Tucker, a former British Airways executive, and Lesley Knox, a director of Legal & General.
An inquiry by the Commons business select committee - chaired at the time by the Labour MP Rachel Reeves - said its directors had exhibited "a lack of challenge in the boardroom as the company piled up debt and Thomas Cook management missed opportunities to reduce debt levels and give the business a viable future".
The threshold for further action such as disqualification proceedings against directors is, however, a high one, and Thomas Cook's slow demise was attributed by many in the travel industry as having largely been the consequence of a failure to adapt to changing consumer behaviour.
The Insolvency Service has pursued disqualification proceedings against bosses involved in other prominent corporate collapses in recent years - most notably at BHS, the department store chain previously owned by Sir Philip Green.
It is also seeking boardroom bans against a number of former directors of Carillion, the construction giant which went bust in 2018.
Thomas Cook had been in talks with creditors for several months about a complex financial restructuring but ran out of time in September, with the renewal of its ATOL licence from the Civil Aviation Authority (CAA) looming.
Fosun, the Chinese leisure and tourism group which was a big shareholder in the London-listed company, had agreed to contribute to a £900m rescue deal, but the talks faltered when it emerged that lenders were demanding a further £200m cushion during eleventh-hour negotiations.
Industry observers subsequently pointed out that any rescue deal would have been undermined by the emergence of the COVID-19 pandemic less than six months later.
Fosun has since unveiled the revival of the Thomas Cook brand as an online travel agent.
A separate investigation into the audit of Thomas Cook's financial statements in the two years to September 30 2018 continues to be undertaken by the Financial Reporting Council.
Sky News reported last month that Thomas Cook's liquidators had launched a bid to offload its small stake in the company behind the UK's air traffic control operations.
Many of its high street shops were bought in the aftermath of its collapse by Hays Travel, the privately owned company.
In response to Sky News' report, an Insolvency Service spokesperson said: "The liquidation of Thomas Cook Group is a complex and significant insolvency, with the Official Receiver carrying out his duties to ensure an orderly wind-up of the failed travel business in the interests of creditors.
"Based on findings by the Official Receiver following an investigation into the conduct of Thomas Cook's directors, the Insolvency Service does not currently intend to bring any disqualification proceedings against the directors."