KANSAS CITY, MO. (TheStreet) -- H&R Block (HRB) shares surged 5% on Thursday after the tax services provider said that it was in discussions to come to a settlement with HSBC (HBC) over continuing to offer refund anticipation loans.
H&R Block said that while its lawsuit is pending with its refund anticipation loan provider, the parties have been "engaged in discussions in an attempt to settle the litigation to confirm the availability of settlement products," according to a company statement.
H&R Block did not disclose details of the discussions, claiming confidentiality. There is also "no assurance that any settlement can be reached," it said.
As settlement talks continue, the company in the meantime is also preparing to "vigorously pursue" the claims. A hearing is scheduled for November 15.H&R Block filed a complaint in mid-October against HSBC after the firm claimed that the U.K. bank was violating "contractual obligations" if it ceased to offer the somewhat controversial refund anticipation loans - a popular H&R Block offering product during tax season. Subsequently, if the loans were no longer offered it could be a material hit to H&R Block's earnings and revenue and create a disadvantage against competitors Jackson Hewitt (JTX) and Intuit (INTU). H&R Block's stock hit a new 52-week-low in October when it first announced the complaint. H&R Block shares as much as 6% shortly after the statement was released in the late morning. The stock was more recently up 4.9% to $12.86 on trading volume of about 5.6 million shares.
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