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Thomas Cook has defended a payout it received from a Corfu hotel where two children died in 2006, underscoring the reputational risk for companies trying to recover costs following a crisis.

The parents of Bobby and Christi Shepherd, who died aged six and seven from carbon monoxide poisoning caused by a faulty boiler at the hotel, told the Mail on Sunday newspaper that they received about one-tenth of the £3.5m Thomas Cook had reportedly received from Louis Hotels, the owner of the holiday resort where the deaths occurred.

The British tour operator confirmed it had received compensation from the hotel because of “costs related to the incident” but did not give details of the sum.

Thomas Cook has attracted criticism for its handling of the long-running case, with several of its executives exercising their right to silence at an inquest in the UK and the company failing to apologise to the family during the hearing.

Last week the inquest jury found that the children had been “unlawfully killed” and that Thomas Cook had “breached its duty of care”, partly based on inadequate checks of the health and safety measures in the complex where it was booking guests to stay.

Users on Twitter reacted angrily to news of the compensation award, with some vowing to boycott Thomas Cook and one pointing out that the company was still offering package holidays to the facility where the children died.

“Shameful and despicable that Thomas Cook put profits first,” tweeted Aisha Gill, an associate professor of criminology at the University of Roehampton.

Richard Elsen, chairman of Byfield Consultancy, a reputation management group specialising in litigation, said Thomas Cook would have taken advice from its legal team regarding compensation, but added: “It’s just a shame that it didn’t take into account what the public might think.”

The average monthly searches for “Thomas Cook” on Google in the UK have fallen 18 per cent to 2.24m compared with the same time last year, according to analysis by Digitalis Reputation, a London-based consultancy.

Dave King, Digitalis’s chief executive, said such a fall in monthly searches could partly be the result of public awareness of the rumbling Corfu crisis.

Thomas Cook said chief executive Peter Fankhauser had written to the family to apologise. But Neil Shepherd, the children’s father, and his ex-wife Sharon Wood said they had not received a letter.

Thomas Cook said it was “shocked and deeply saddened” by the incident, and “recognises that the pain caused by this terrible accident will never go away and must be still very hard for friends and family to bear”.

News of the payout has struck Thomas Cook at a vulnerable time, as it recovers from the shock departure of chief executive Harriet Green late last year.

“If Thomas Cook had acted better with the family at the beginning, they wouldn’t be reaping the whirlwind now,” Mr Elsen said, pointing to the parents’ story of being flown home on a Thomas Cook flight alongside other travellers with young children after the trauma, instead of on a private flight.

“What can happen in organisations is that there may be a bit of box-ticking that comes into it — OK, we’ve seen the family, tick; yes, we’re flying them over, tick,” he added. “But if you’re out there in the consumer market, you’re selling holidays to millions of people, you ought to be acutely aware of the threat of damage to your reputation, even when a third party is mainly at fault.”

A criminal case in Greece 2010 found three hotel staff members guilty of manslaughter by negligence, and cleared Thomas Cook of wrongdoing.

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