Tax preparation company files for chapter 11

Jackson Hewitt Tax Service Inc. (JTX) filed for bankruptcy, saying it has a deal with secured lenders that will let the tax-preparation company exit court protection within 60 days.

The filing comes after U.S. regulators moved to curb the loans that tax preparers arrange for customers expecting refunds. Jackson Hewitt listed as much as $500 million in assets and debts in Chapter 11 documents filed in U.S. Bankruptcy Court in Wilmington, Delaware. Chapter 11 of the bankruptcy code is typically used by companies trying to reorganize and continue operating.

‘The debt and interest rate burden we have carried in recent years has limited our potential and financial flexibility and this will no longer be the case,’ Chief Executive Officer Philip H. Sanford said in a statement.

In March, Jackson Hewitt said it was working on a prepackaged bankruptcy with lenders and there was “uncertainty” about its ability to continue as a going concern. ”

Here is a link to the entire article: http://www.bloomberg.com/news/2011-05-24/jackson-hewitt-tax-service-files-for-bankruptcy-after-loan-curb-push.html

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