Lender warns of insolvency as loans claims pile high
Nottingham-based sub-prime lender Morses Club has warned that it will enter insolvency unless it agrees a Scheme of Arrangement.
The firm has said it has suspended processing claims made against its “unaffordable” loans while it pursues the potential use of a such a Scheme.
In a statement this morning (September 30), Morses Club said it is racking up losses and it is struggling to generate new cash as new client numbers tumble and its loan book figures decrease by as much as a third.
Gary Marshall, chief executive officer of Morses Club, said: “The level of previous claims in our Home Collected Credit division continues to impact the overall trading performance of the business, which means we are materially loss-making as a result and has the additional impact of constraining the cash available to generate future revenue.
“Although the business continues to be a going concern, the material uncertainty of the trading position of the group means that it is increasingly imperative that we make substantive progress regarding a potential Scheme of Arrangement. We continue to pause the processing of customer claims received from 11 August pursuant to DISP 1.6.2R(2). We continue to work with all our key stakeholders to make formal progress on a potential Scheme of Arrangement, to avoid the company having to seek protection from insolvency, which would lead to a materially worse outcome for customers.”