Amigo Shares Collapse After London Court Stops Compensation Plan

A London court has blocked a plan by subprime lender Amigo Holdings Plc to compensate customers sold loans they couldn’t afford, putting it at risk of insolvency and sending its shares into a tailspin on Tuesday.

The stock fell as much as 61% in London, its biggest ever drop, while the company’s bonds retreated 10 pence on the pound to 78 pence before paring some of the losses, according to data compiled by Bloomberg.

In a crucial case for the country’s consumer credit industry, judge Robert Miles rejected the proposal after the U.K.’s Financial Conduct Authority opposed the company’s scheme ...