It is hard to see any silver lining in the collapse of Thomas Cook, which has left 21,000 people facing almost certain redundancy and the government on the hook for repatriating the firm’s British customers.

But for some financial speculators the bankruptcy is good news. It is set to earn hedge funds, including Sona Asset Management and XAIA Investment, as much as $250m (£201m).

They invested in financial products that pay out when a company defaults on its debts. The fate of those so-called credit default swaps (CDS) was at the heart of the battle over whether Thomas Cook lived or died.

The decision to trigger payouts on Thomas Cook CDS lies with a panel of traders called the Determinations Committee. The group was due to meet on Monday to debate whether the Chapter 15 US bankruptcy filing by Thomas Cook last week is sufficient for payment. Now, it has also been asked to assess Thomas Cook’s liquidation.

CDS are a popular way for hedge funds to bet on companies facing financial difficulties. They don’t always pay out in the event of default, however.

Thomas Cook collapse: Passengers stranded and thousands of jobs lost Show all 21 1 /21 Thomas Cook collapse: Passengers stranded and thousands of jobs lost Thomas Cook collapse: Passengers stranded and thousands of jobs lost Antalya, Turkey British passengers with Thomas Cook wait in long queue at Antalya airport in Turkey AP Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca, Spain Passengers are seen at Thomas Cook check-in points at Mallorca Airport after the world's oldest travel firm collapsed stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history, in Palma de Mallorca, Spain, September 23, 2019. REUTERS/Enrique Calvo ENRIQUE CALVO Reuters Thomas Cook collapse: Passengers stranded and thousands of jobs lost Peterborough headquarters People carry bags and boxes outside the Peterborough headquarters. A total of 22,000 jobs - including 9,000 in UK - to be lost following administration PA Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca More than 150,000 British holidaymakers need to be brought home, with the government and CAA hiring dozens of charter planes to fly customers home free of charge AFP/Getty Thomas Cook collapse: Passengers stranded and thousands of jobs lost Manchester Airport The group failed to reach a last-ditch rescue deal, triggering the UK's biggest repatriation since World War II to bring back stranded passengers Reuters Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca Passengers talk to Civil Aviation Authority employees at Mallorca Airport after Thomas Cook declared bankruptcy Reuters Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca, Spain The 178-year-old operator had been desperately seeking £200 million from private investors to save it from collapse AFP/Getty Thomas Cook collapse: Passengers stranded and thousands of jobs lost London Pedestrians walk past a closed branch of a Thomas Cook AFP/Getty Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca, Spain Passengers of British travel group Thomas Cook wait at Son Sant Joan airport in Palma de Mallorca on September 23, 2019. - British travel group Thomas Cook declared bankruptcy on September 23, 2019 after failing to reach a last-ditch rescue deal, triggering the UK's biggest repatriation since World War II to bring back stranded passengers. The 178-year-old operator had been desperately seeking Â£200 million ($250 million, 227 million euros) from private investors to save it from collapse. (Photo by JAIME REINA / AFP)JAIME REINA/AFP/Getty Images JAIME REINA AFP/Getty Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca, Spain A British Government official talks to passengers AFP/Getty Thomas Cook collapse: Passengers stranded and thousands of jobs lost Peterborough headquarters A woman carries a box through the carpark PA Thomas Cook collapse: Passengers stranded and thousands of jobs lost Crete, Greece People line up in front of a Thomas Cook counter at the Heraklion airport Reuters Thomas Cook collapse: Passengers stranded and thousands of jobs lost Manchester Airport A British Government official assists passengers Reuters Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca, Spain Passengers of British travel group Thomas Cook queue at Son Sant Joan airport in Palma de Mallorca on September 23, 2019. - British travel group Thomas Cook declared bankruptcy on September 23, 2019 after failing to reach a last-ditch rescue deal, triggering the UK's biggest repatriation since World War II to bring back stranded passengers. The 178-year-old operator had been desperately seeking Â£200 million ($250 million, 227 million euros) from private investors to save it from collapse. (Photo by JAIME REINA / AFP)JAIME REINA/AFP/Getty Images JAIME REINA AFP/Getty Thomas Cook collapse: Passengers stranded and thousands of jobs lost Crete, Greece People line up in front of a counter of Thomas Cook at the Heraklion airport on the island of Crete, Greece September 23, 2019 REUTERS/Stefanos Rapanis STEFANOS RAPANIS Reuters Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca, Spain Passengers sit on the floor EPA Thomas Cook collapse: Passengers stranded and thousands of jobs lost Tunis, Tunisia Tourists, flying with Thomas Cook, queue at the Enfidha International airport AFP/Getty Thomas Cook collapse: Passengers stranded and thousands of jobs lost Peterborough headquarters A man sits outside PA Thomas Cook collapse: Passengers stranded and thousands of jobs lost Split, Croatia Passengers wait inside Split airport AFP/Getty Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca, Spain Thomas Cook staff speak with British passengers AP Thomas Cook collapse: Passengers stranded and thousands of jobs lost Mallorca, Spain Passengers are seen at Thomas Cook check-in points at Mallorca Airport after the world's oldest travel firm collapsed stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history, in Palma de Mallorca, Spain, September 23, 2019. REUTERS/Enrique Calvo ENRIQUE CALVO Reuters

If Thomas Cook had been rescued, thanks to a deal long in the works, CDS on the company’s debt may have become worthless and investors including Sona had threatened to block the rescue plan. Holders of CDS were concerned about a technicality related to plans to convert Thomas Cook debt into shares, which would have left the CDS with nothing to insure.

“It’s certainly a relief for the hedge funds that Thomas Cook has filed and they haven’t had to push the company into administration,” said Marc Pierron, a senior analyst at Spread Research.

If rescue talks hadn’t collapsed over the weekend and the hedge funds had undermined them to ensure a payout, it would have added to criticism of the CDS market.

Regulators are already keeping an eye out for so-called manufactured credit events, when funds entice companies to miss bond payments they could otherwise make.

Thomas Cook will be the latest of several big payouts this year for hedge funds and traders who bought CDS. The list includes retailer New Look and Rallye, parent of French supermarket chain Casino Guichard-Perrachon. More are set to follow as Europe’s economy slows and a growing number of companies come under stress.