LOAN company Amigo says it will not appeal against the court judgement which left the company’s future in doubt.

The Bournemouth-based subprime lender said it would be exploring all options including insolvency.

The guarantor loans business, which employs around 400 people, failed to win approval from the High Court for a scheme which would cap the compensation paid out to people with mis-selling complaints.

The claimants would have received around 10p in the pound on their claims and Amigo had told the court it would “inevitably” go into administration if the scheme was not approved.

But the court agreed with the Financial Conduct Authority (FCA), which said the company should come up with another plan and that its existing proposals unfairly put shareholders ahead of claimants.

A statement from Amigo yesterday morning said: “Following the Court judgment 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, 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.”

Amigo has faced a rising tide of complaints from customers – many of them coming via claims management companies. It has also been subjected to increasing scrutiny by regulators.

Its proposals to cap the amount of compensation paid to mis-selling claimants were backed by 95 per cent of creditors taking part in a vote – by 74,877 votes to 3,863.

Amigo told the High Court that 70,000 complainants would be left empty-handed if it went into administration.

But in his judgement, Mr Justice Wills accepted the FCA’s argument that rejecting the Amigo’s proposals would “probably not lead to the imminent insolvency of the group”.

He said the vote on the proposals saw a turnout of around nine per cent. The creditors who backed the scheme “lacked the necessary information or experience” to assess the alternatives.

He urged Amigo’s directors to continue efforts to promote a “suitable restructuring”.