Payday lender has run out of cash
The announcement comes less than a week after the Australian Securities and Insurance Commission asked the Federal Court to fine the company millions of dollars for alleged breaches of the credit act.
ASIC claimed the company, which charged as much as 240 per cent interest per annum on some loans, had provided short-term loans to customers who couldn't afford them.
A statement by the Canadian parent company said the Australian operations were "insolvent or likely to become so at some future time". Chief executive Tom Denovan resigned last Thursday.
The company's website told visitors that it wouldn't be making any new loans, while administrators from Bentleys Corporate Recovery undertook a review of its operations.
But for borrowers there will be no reprieve.
While it would not issue any new loans, it said it would otherwise be business as usual and borrowers should repay their loans in accordance with their agreements.
ASIC confirmed its proceedings against The Cash Store, and the company's lender, Assistive Finance, were continuing, with a directions hearing on September 27. The administration does not include Assistive Finance.
A spokesman for Bentleys said he understood these sorts of proceedings were automatically suspended when an administrator had been appointed.
Frequently Asked Questions about this Article…
The Cash Store, one of Australia’s largest payday lenders with 61 stores, has gone broke and appointed a voluntary administrator. The Canadian parent said the Australian operations were "insolvent or likely to become so," and the appointment is intended to allow administrators to review operations and work out how to repay the company’s debts.
Administrators from Bentleys Corporate Recovery have been appointed. According to the company, they will review The Cash Store’s operations and undertake the process required to determine how creditors and other stakeholders will be repaid.
No. The company’s website said it will not be making any new loans while administrators review the business, although it added that otherwise it would be business as usual.
Yes. The article states there will be no reprieve for borrowers — customers were told to continue repaying their loans in accordance with their original loan agreements.
The Australian Securities and Investments Commission (ASIC) has asked the Federal Court to fine The Cash Store millions of dollars for alleged breaches of the credit act. ASIC alleges the company charged interest rates of up to 240% per annum on some loans and provided short-term loans to customers who couldn’t afford them. ASIC confirmed its proceedings are continuing, with a directions hearing set for September 27.
The administration does not include The Cash Store’s lender, Assistive Finance. ASIC confirmed proceedings against both The Cash Store and Assistive Finance are continuing with a directions hearing on September 27. At the same time, a spokesman for Bentleys said he understood these types of proceedings are automatically suspended when an administrator is appointed, so there are competing procedural effects noted in the article.
Yes. The article says chief executive Tom Denovan resigned last Thursday, around the time the Canadian parent company described the Australian operations as insolvent or likely to become so.
Everyday investors and creditors should monitor updates from the administrators (Bentleys Corporate Recovery), ASIC’s court proceedings, and any announcements on the company website. The administrators will review the business and outline how debts and creditor claims will be handled — the article does not provide outcomes, only that the administration process has begun.
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