In an unprecedented move, HSBC Bank USA has decided to back out of providing funding for Refund Anticipation Loans (RAL) for the upcoming season, leaving perennial f---k-ups H&R Block with their proverbial d--ks in their hands.
HA! HRB stock spent most of Friday trading below ten dollars. It closed at 10.85, its 52 week low.
Like the guy with the telescope said, "Iceberg, right ahead!"
"How the hell are we going to fleece our customers for ridiculously expensive refund loans if HSBC isn't going to fund them?" asked H&R Block, in court papers filed today. "I mean, we have our own bank and all, but we ain't loaning our money to these f--king deadbeats."
HSBC, who famously f--ked over Jackson Hewitt (JH) Tax Service by pulling out of their deal, has two novel legal theories upon which they hang their greedy, scummy, contract-breaking hat.
"They could say that H&R Block has materially breached the contract, making the entire contract unenforceable," said amazingly supergifted legal analyst Anthony Rosania."But that is why contracts are broken up into different sections. Even if one part is unenforceable, the rest of the contract remains intact.
"With so many states outlawing refund loans," Rosania continued."They can argue that the contract contrary to public policy, and therefore unenforceable."
"My gut feeling, however, is that HSBC has weighed the cost of litigating against Block, versus honoring the contract, and losing their shirts in bad debt," Rosania concluded.
Block filed a lawsuit recently that alleges HSBC has failed to honor its contract to back the loans, which expires next year. The suit says HSBC has not taken the necessary planning steps to ensure that H&R Block will be able to offer refund anticipation loans and refund anticipation checks during the 2011 tax season.
"Oh my God, we are f--ked," said CEU Du Jour Alan Bennett, while packing the contents of his office into boxes. "This'll never get litigated in time for tax season."
"On the other hand, it would give us the perfect outsider scapegoat for why we tanked this tax season," said Bennett, already resigned to the fact that tax season 2011 is a sh-tburger waiting to get grilled. "Usually, when we have a bad tax season we apologize to our stock holders, blame the field leadership for droppng the ball, and then give Sabrina Weiwel a new job title."
In the lawsuit, H&R Block said they fleece about 40 percent of its customers with a bank product during the 2010 tax season.
They also state that HSBC is trying to back out of funding its refund anticipation products because without help from the IRS, the bank fears it will lose money.
"No sh-t, Sherlock," responded HSBC. "That is what successful companies do, they avoid endeavors that will make them lose money. You f--kers ought to give that a try."
Block's other concern is the ability for RAL seeking clients who can't be helped by Block will simply walk down the street and get a RAL at Dave's Deli and Tax Preparation Service.
"Last year, Jackson Hewitt had almost no funding for their early season RAL clients, and those clients left JH in droves," said Bennett. "And just where did those clients who left Jackson Hewitt end up going?"
"No, seriously," concluded Bennett. "I'm asking you: Where did they go? They didn't come to Block, that's for damned sure."