The Competition and Markets Authority began legal action against Truly Holdings, the parent company of Teletext Holidays and Alpharooms.com in October, before it entered voluntary liquidation on 2 December. 

The CMA has now temporarily paused proceedings to enable the liquidation to progress.

However, it is still continuing with a request for a declaration as to whether Teletext Holidays and Alpharooms.com breached the Package Travel and Linked Travel Arrangements Regulations.

It said: “The CMA considers that it is important to continue with its claim for a declaration in order to provide further certainty to people still waiting for refunds for cancelled package holidays. 

“A declaration from the court may also make it easier for people to obtain refunds in future if their package holiday is cancelled by other providers due to the Covid-19 pandemic and will emphasise to businesses in the sector the importance of complying with their refund obligations.”

The court has ordered that the CMA’s claim for a declaration shall be listed for a hearing on the first open date after 11 January 2021.

The CMA first warned Truly Holdings about its behaviour in mid-September, stating it would take action unless it improved the way it handled refunds to package customers during the pandemic. 

The CMA said Truly Holdings had so far paid back more than £7 million as a result of its actions.