Troubled consumer lender AMIGO's proposed scheme to cap compensation claims for "unaffordable or unsustainable" lending has been rejected in a rare move by the High Court of England and Wales, potentially putting the company's future at risk. Amigo had faced difficulties even before suspending lending to all except key workers in March 2020 as a result of the pandemic. With claims mounting over missold loans, there were fears that its loan book would simply be run down, leaving little to repay creditors. To confront that, Amigo first outlined a scheme of arrangement in December to limit claims, which was backed by creditors in a vote on May 12. Nearly 75,000 customers, or 95% of those voting, supported the plan. That was still a small proportion of the one million current or former customers entitled to vote. And crucially the scheme also needed to be approved by the court.
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