Tax service provider completes and returns bankruptcy filing

US tax services provider Jackson Hewitt Tax Services (JHTS) filed for chapter 11 bankruptcy in Delaware on Tuesday, with approximately $357 million in debt outstanding. 

This figure includes just over $214 million in term loans, $141 million in a revolver (including rolled up PIK interest), and nearly $2 million in hedging arrangements.

The company provides computerised preparation services for federal, state, and local individual income tax returns in the US through a network of franchised and company-owned offices throughout the US. The company has around 700 franchisees with nearly 5,000 offices, as well as over 1,100 offices it owns itself.

JHTS has entered bankruptcy as the firm says it can 'no longer sustain the amount of debt obligations' under current credit arrangements. The company's debt obligations were entered into when the firm had a significantly higher ebitda, standing at approximately $75 million in 2009 but falling to under $47 million by 2010. The company's declining ebtida has been driven by several factors, including a several-year decline in the number of tax returns prepared year-over-year and overall operating performance, according to papers filed with the bankruptcy courts.