BBC News explains why one of the travel industry's biggest names MyTravel is fighting for survival in the High Court.

Is the sun going down on MyTravel

Why is MyTravel in trouble?

Like everybody in the travel industry, MyTravel saw tough times post-September 11.

However, the problems of the firm, formerly known as Airtours, were compounded by a costly but unsuccessful expansion drive and accountancy errors.

It has also failed to adapt to the new realities of the travel business - in particular the greater freedom of choice demanded by adventurous travellers, and the attractions of constructing holidays through the internet.

Despite efforts to cut expenses by shedding thousands of jobs and selling businesses, its debts have just kept on piling up.

So what did the firm do?

The company put forward a proposal to get rid of its debts by issuing new shares.

It wants to do this via an equity swap - whereby it would issue new shares in exchange for �800m ($1.47bn) of its debt.

Once the swap is completed, creditors will hold 88% of the firm's shares. Bondholders will get 8%, leaving shareholders with 4%.

So why the High Court hearing?

MyTravel's bondholders (banks and other city institutions), who include Fidelity, Societe Generale, Lehman Brothers, and New Star Asset Management, have argued that the travel firm does not have the legal right to take such action.

They have reportedly questioned whether the company had explored if there might be claims against some of its former directors for "gross mismanagement", noting that the former top managers were "extremely wealthy men".

But MyTravel says an adverse court decision could plunge the firm into administration.

It has threatened to use a scheme of arrangement - a compromise approved by a court - to bypass them.

The firm has added that should it be forced to go to court to get permission for such a scheme, it would halve the bondholders' stake to 4%.

That would halve again to 2% if it had to impose the scheme, it says.

Schemes of arrangement are unpopular because they are complex and costly.

So will MyTravel collapse?

It cannot be ruled out.

But MyTravel says its books are healthy and it is implementing cost-cutting measures.

I've booked a holiday with MyTravel. Should I be worried?

Like most large holiday operators, MyTravel's packages are covered by a cast-iron bond: as long as you have booked and paid, you will either get all your money back, or your holiday in every last particular.

If MyTravel were to go belly-up while you were on holiday, the worst that could happen is that you might have a few forms to fill in.

There are a few caveats for its budget airline, MyTravel Lite, however.

Its flights are covered by no bond, and so there is no guarantee of compensation or an alternative service if you're stranded.