The Cash Store Financial Services Inc. (TSX:CSF) says its application for creditor protection has been granted by an Ontario court.
The Cash Store says it sought protection to address liquidity issues caused in part by regulatory actions taken in Ontario that affected its operations there.
In mid-February, Ontario’s Registrar of Payday Loans says it wanted to deny new licences to Edmonton-based Cash Store Financial Services Inc.
The registrar cited conduct that included convictions in November 2013 that Cash Store and Instaloans were operating as unlicensed payday lenders.
It also alleged the company charged more than a legal maximum of $21 for every $100 payday loan and that the loans were not provided immediately to consumers.
Cash Store Financial says its board determined that a proceeding under the Companies’ Creditors Arrangement Act is the best way to carry on business and maximize value for stakeholders.
The company says it remains open for business, its branches continue to operate and daily lending is continuing.
Cash Store Financial has 510 branches across Canada under the banners “Cash Store Financial” and “Instaloans.” It also operates 27 branches in the United Kingdom.
The company says FTI Consulting Canada Inc. will serve as a court-appointed monitor of the company and report to the court during a restructuring.