The Competition and Markets Authority (CMA) has agreed to temporarily pause its legal action against Teletext Holidays and Alpharooms to allow the companies to be liquidated.

However, the CMA said it was continuing with its request for a declaration as to whether the companies breached the Package Travel and Linked Travel Arrangements by not refunding customers when their holidays were cancelled due to COVID.

The CMA said it’s important to continue with its claims for a declaration 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,” it said.

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 2022.

Teletext and Alpharooms, both owned by Truly Travel, went into voluntary liquidation on 2 December after losing their ATOL licence.

They owed £1.2m to holidaymakers for cancelled packages.