According to the encounter hyothesis, about 5 Gya, a rogue star passed close to the sun and stripped materials (hot gases) from both the sun and the rogue star. The hot gases continued to spin in the same direction as the sun, and coalesced into smaller lumps which formed the planets.
The encounter hypothesis was able to explain why all the planets revolve in the same direction and why the inner planets are denser than the outer ones. However, the first problem with this theory is that even though hot gas expand, they would not contract.