Rent-to-own retailer, BrightHouse is reportedly on the brink of collapse, putting 2400 workers at risk of redundancy.
The high street chain has appointed Grant Thornton on standby to handle an administration, which would follow the likes of Wonga, PiggyBank and Quidquid, which all collapsed over compensation claims.
The store, which provides loans to customers to purchase electrical items such as televisions and washing machines has been struggling financially for years.
On Saturday, it emerged that the company had put administrators on standby, with insolvency likely to take place in weeks.
The company said it needed the support of stakeholders in a bid to be "successful" and is currently in active discussions with them.
BrightHouse most recently went through a restructuring back in 2017 - last year it closed 10% of its stores.
Do you work for Brighthouse? Get in touch: emma.munbodh@mirror.co.uk
Advisors including EY and Freshfields Bruckhaus Deringer have in recent months been working along with Grant Thornton to consider different options for BrightHouse.
One of the options being considered is a scheme of arrangement to deal with mis-selling claims.
It comes after the FCA called for the retailer to repay nearly 250,000 customers a total of £14.8million, for failing to act as a "responsible lender" in 2017.
These claims are costing BrightHouse a reported £1million each month.
On Friday, BrightHouse said it was conducting a strategic review to maximise value for stakeholders.
"We have disclosed a contingent liability with respect to the uncertainty around the future volume of claims and the potential outcome of the test cases under discussion with FOS," the retailer said.
"The level of redress claims from customers is putting increasing pressure on the available liquidity in the group."
BrightHouse told employees it was considering selling its logistics and engineering business at the time.
Last month, the retailer fell to a loss of £16million in its latest financial quarter after being hit by rising compensation claims.
It came after the chain closed 30 stores last year, a tenth of its total branch network.
