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Jackson Hewitt Files Bankruptcy 5/27/2011

JACKSON HEWITT TAX SERVICES FILES FOR CHAPTER 11

 

According to an article in Bloomberg (http://bloom.bg/koN9kB) by Steven Church, Jackson Hewitt Tax Service, Inc. has filed for bankruptcy relief under Chapter 11 in the U.S. Bankruptcy Court in Wilmington, Delaware.  Jackson Hewitt had little choice but to file bankruptcy after U.S. Regulators moved to curb the loans that tax preparers arrange for customers expecting refunds.   Jackson Hewitt believes it has a deal with secured lenders which will allow the tax-preparation company to exit bankruptcy court protection within 60 days.  Under Jackson Hewitt’s bankruptcy plan, the lenders would receive a new $100 million term loan and all of the equity in the company once it reorganizes and leaves bankruptcy.   This might be the end of the so-called refund anticipation loans as they are under scrutiny by regulators for the FDIC and Office of the Comptroller of the Currency (OCC).  The biggest U.S. tax preparer, H&R Block, Inc., will not be offering tax-refund loans this year after the OCC, which regulates national banks, blocked HSBC Holdings PLC from funding them.  JPMorgan Chase & Co. has also stopped the refund-loan business in April 2010. 

 

If you are considering filing for bankruptcy contact Tiller Law -  Bankruptcy Lawyers and Bankruptcy Attorneys serving Miami, Fort Lauderdale, West Palm Beach, Palm Beach Gardens, Stuart, St. Petersburg, Tampa, and surrounding areas.

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