High Court rejects Amigo’s compensation plan, shares collapse

Amigo Holdings shares have collapsed by over 50% on Tuesday after the High Court rejected the company’s plan to compensate customers.

The Scheme of Arrangement, or Scheme, would see creditors receive some compensation after the mis-selling scandal that led to a surge of complaints.

The scheme would have limited payouts and set a time restriction on them, something that Amigo said was necessary to avoid liquidation.

However, the UK’s Financial Conduct Authority argued against the Scheme in the High Court, calling it unfair on the creditors. The regulator argued that other stakeholders haven’t paid a price for the scandal and creditors should be compensated better.

The rejection in the High Court puts the future of Amigo in doubt. Previously, the company said that the Scheme was essential for it to survive. If the company ceases trading as a business, then creditors could end up receiving nothing.

“Amigo is incredibly disappointed that the Scheme has not been approved despite the 74,877 customers who voted in support of the Scheme, representing over 95% of those who voted,” said Amigo Holdings (LON:AMGO) CEO Gary Jennison. “We are currently reviewing all our options and will provide an update at the earliest opportunity.”

At 10:06BST, shares in Amigo Holdings were trading lower by 51% at 9.15 pence per share.