SEA CONTAINERS, the owner of GNER, is considering bringing a legal action in the European courts to prevent Grand Central, a rival train operator, from operating over its tracks.

The US-listed transport and freight group, which filed for Chapter 11 bankruptcy protection last night, believes that the High Court was wrong to grant the so-called “open access” operator the go ahead in a judicial review in August.

Bob Mackenzie, Sea Containers’ president and chief executive, told The Times: “It’s utter nonsense that they can be allowed to start up when they pay 60 per cent lower access charges than we do. Their business will effectively be subsidised by GNER.”

Mr Mackenzie said that GNER’s service on the East Coast Main Line from Lon- don to Scotland would be unaffected by the bankruptcy protection proceedings, but he revealed that there would be job cuts on the flagship inter-city service. “We don’t know yet how many people will have to go,” he said.

Sea Containers is continuing to talk to the Department for Transport about the franchise and is arguing that it should be compensated for the decision to allow Grand Central to run a service from London to Sunderland. Despite the department’s denials that it is prepared to renegotiate the franchise, Sea Containers’ bargaining chip appears to be that it could hand back the franchise, forcing the DFT to put it out to tender again. Mr Mackenzie declined to rule out handing back the franchise, although the company has ruled out selling GNER.

Sea Containers applied for bankruptcy protection after it failed to meet a bond repayment due on Sunday. The company had given warning in June that it would not make the payment if it was unable to meet its other debt obligations.

The group, which has sold its ferries business this year and has 15 other businesses up for sale, including a banana plantation, said that it hoped to conclude financial restructuring in a matter of months, but it is still to persuade its creditors to sign confidentiality documents that allow them to see the full extent of the company’s restructuring plans. Creditors who have not signed confidentiality agreements can continue to trade the company’s bonds.

The group said that it had $126 million (£68 million) in cash, of which around $59 million was either restricted as security or held in subsidiaries and could not be transferred back to the company. The company has $650 million of debt.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax