Tue, 01 Jun 2021 | ADMINISTRATION
Loan company Amigo has said it is considering all options including insolvency and entering administration after a court judgement rejected its plans to reduce its financial responsibilities.
The Bournemouth-based guarantor loans business, which employs around 400 people, failed to win High Court approval for a scheme that would allow it to put a cap on the amount of compensation that will be paid to people with mis-selling complaints.
Under the scheme, any claimants would have received around 10p per £1 on their claim, with Amigo stating that failure to receive approval for the scheme would result in the company "inevitably" falling into administration.
However, the High Court agreed with the Financial Conduct Authority (FCA), which stated that these proposals put the shareholders ahead of the claimants.
Responding to the court judgement, Amigo released a statement that revealed it would be now be taking the time to consider all alternative options available, including insolvency and entering administration.
"Following the Court judgement announced on May 25, 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 of Amigo, added: "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."
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This practice, which was established in the 1980s, is available for sale. The Partners would be available to assist in the transition period to ensure a smooth handover of clients.
This practice, which was established over 30 years ago, is available for sale. The Partners would be available to assist in the transition period to ensure a smooth handover of clients.
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