EDMONTON, Sept. 19, 2013 /PRNewswire/ - The Cash Store Financial Services Inc. ("Cash Store Financial" or the "Company") (TSX:CSF) (NYSE:CSFS) today announced that Assistive Financial Corp. ("Assistive") has commenced an action in the Court of Queens's Bench of Alberta against Cash Store Financial and certain of its officers and affiliates, including The Cash Store Australia Holdings Inc. and RTF Financial Holdings Inc. (the "Affiliates"), seeking repayment of certain funds advanced for the Affiliates by Assistive. The claim seeks, among other things, damages equivalent to $110,000,000, together with interest thereon at the rate of 17.5% per year.
Cash Store Financial believes the action is wholly without merit and intends to vigorously defend itself. The Company maintains that it is not in default of any contractual obligations to Assistive and that this development is not expected to materially impact the financial position or results of operations of Cash Store Financial.
Assistive is a privately-held third-party lender that provides advances to the Company's customers. Following written notification from Assistive on September 3, 2013, Cash Store Financial suspended brokering advances to consumers on behalf of Assistive. Cash Store Financial has continued to broker payday loans and lines of credit on behalf of its other third-party lenders. As of September 3, 2013, Assistive had made available less than 2% of total consumer funding provided by all of the Company's third-party lenders.
The Company will provide further updates to this matter as material developments occur.About Cash Store Financial Cash Store Financial is the only lender and broker of short-term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX:CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE:CSFS). Cash Store Financial operates 510 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 27 branches in the United Kingdom. Cash Store Financial and Instaloans primarily act as lenders and brokers to facilitate short-term advances and provide other financial services to income-earning consumers who may not be able to obtain them from traditional banks. Cash Store Financial also provides a private-label debit card (the "Freedom" card) and a prepaid credit card (the "Freedom MasterCard") as well as other financial services, including bank accounts.