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High Court rejects Amigo’s redress scheme

The High Court has rejected Amigo’s proposal for a redress scheme, as the judge urges the directors to restructure the group.

Mr Justice Miles has issued a ruling stating that he was “not satisfied that the court should sanction the scheme”.

 

He explained that some form of restructuring of the group is “clearly desirable and indeed needed."

 

He said: “I have accepted the submissions of the Financial Conduct Authority (FCA) that the redress creditors lacked the necessary information or experience to enable them properly to appreciate the alternative options reasonably available to them.”

 

The FCA opposed the scheme, as it believed the scheme was “inherently unfair”. The watchdog said the scheme “placed a disproportionate burden on customers, as opposed to shareholders and bondholders, to keep the company afloat.”

 

Amigo had previously warned that should the scheme fail, Amigo would likely enter insolvency.

 

However, the judge said that he accepted the FCA’s submission showing the court’s refusal to sanction the scheme would probably not lead to the imminent insolvency of the group.

 

Amigo’s board is now reviewing all options including an appeal.

 

Gary Jennison, chief executive of Amigo, said: "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. We are currently reviewing all our options and will provide an update at the earliest opportunity."

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