Vesttoo creditors seek $500,000 recovery from Appleby
Described by one litigator as one of the largest and most brazen insurance frauds in corporate history, the latest in the Vesttoo case has creditors from the failed insurtech’s bankruptcy trust suing broker Aon and the China Construction Bank, alleging fraudulent conduct and blaming them for the collapse of Vesttoo.
Artemis.bm is reporting on court filings with creditors claiming that the China Construction Bank enabled an employee conspiracy to produce $2.8 billion in forged collateral.
In another case before a Delaware court, the creditors of the failed ILS platform were last week seeking to avoid and recover transfers of nearly $500,000 against Appleby (Bermuda) Ltd, or from any other person or entity for whose benefit the transfers were made, including all preferential transfers of property that occurred during the 90-day period before the start of the debtors’ bankruptcy proceedings.
It is just more in a dizzying array of claims and counterclaims in the Vesttoo case.
The document filed in a US court last week naming Appleby as the defendant, and published by Offshore Alert, also seeks to disallow any claims held by the defendant.
The statement of account lists 14 transfer amounts in 2023, totalling $489,203.79 in the Chapter 11 case before the United States Bankruptcy Court for the District of Delaware.
Vesttoo was an Israeli fintech start-up founded in 2018 by Israeli businessmen who sought to bring insurance companies together with capital market investors, acting as an alternative to traditional reinsurers.
Law firm Browne Jacobson described it in December 2023: “Investors would purchase what was known as an ‘insurance basket’ and would receive a payment for the risk they were taking on — and share the losses in the event of an insurance event.
“Vesttoo developed a platform that would mediate between insurers and investors to ensure the transactions were properly conducted. Part of that process included ensuring that the investors had the appropriate collateral, usually in the form of letters of credit.”
But a fake letter of credit emerged that had not been detected by Vesttoo’s systems. That was followed by an exhaustive review of all Vesttoo’s letters of credit and the subsequent discovery of an apparent massive fraud involving multiple fraudulent letters of credit all being issued by the same bank.
Proceedings have been issued against Vesttoo by Aon White Rock, which faced its own legal action, as courts in Bermuda, Delaware and Israel sought to unravel the facts.
Vesttoo filed for bankruptcy after the closure of multiple offices, including one in Bermuda.
• For more on the Vesttoo Creditors Liquidating Trust V Appleby (Bermuda) Ltd, see Related Media
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