Amigo facing potential insolvency after High Court ruling

Sub-prime lender, Amigo has warned that it faces potential collapse after confirming that it will not appeal against a High Court decision that blocked a scheme to cap customer compensation.

The firm said it would ‘consider all options’ noting that it is looking at an alternative scheme to manage the costs of customer compensation claims.

Amigo has said it will not appeal against that decision and was, instead, investigating all options – including an alternative plan, or insolvency.

Amigo has 150,000 current customers and 500,000 past customers.

Amigo’s company statement said “Following the Court judgment announced on 25 May 2021 where the Scheme was not approved, Amigo can confirm that SchemeCo will not be pursuing an appeal. The Board of Amigo continues to consider all options, which includes insolvency, and whether it might be possible and appropriate, given the cost of a scheme, to promote another scheme of arrangement to avoid insolvency. Amigo will continue to liaise in the coming weeks with its regulator the FCA to seek to address its concerns as quickly as possible.”

Gary Jennison, Chief Executive Officer of Amigo, said “Without a scheme, Amigo faces insolvency as it will be unable to satisfy its customer compensation claims as well as meeting the legally binding funding obligations owed to its secured creditors.  The Board is committed to finding the best solution it can for Amigo’s customers and other stakeholders and will be working with its stakeholders, including the FCA, to achieve that solution as quickly as it can.”