LONDON, March 30 (Reuters) - Britain’s High Court has given a green light to a rescue plan by Amigo that lets the guarantor lender cut compensation payouts to customers, the company said, a move that has drawn criticism from politicians and consumer groups.
Amigo applied to the court for permission to cap payments, saying a deluge of mis-selling claims threatened the firm with collapse.
Britain’s financial watchdog said it did not support the scheme this month but did not take action. Politicians and consumer groups say such a move would short change customers.
The High Court granted an order permitting Amigo to put the proposal to a vote of a million former and current customers, with a creditors’ meeting scheduled for May, the firm said.
A final court hearing on whether to give the scheme final approval is expected to be held in May, Amigo said.
Amigo Chief Executive Gary Jennison encouraged customers to back the scheme in a statement, saying the only alternative was the company’s insolvency.
Reporting by Iain Withers; Editing by Edmund Blair