Move comes as Aon subsidiary seeks return of collateral
Vesttoo, which is being asked by Aon subsidiary White Rock to return US$127 million in collateral amid a fraud-related controversy, has commenced Chapter 11 proceedings in the US.
The goal, Vesttoo said in an emailed release, is “to emerge from this process a stronger partner to all of our stakeholders” and not to liquidate the troubled organisation. The company noted that its platform and capital structure remain stable and sustainable under Chapter 11 protection.
According to the insurtech, it determined that Chapter 11 was necessary to protect the firm’s assets and serve as a forum to pursue legal action against those responsible for the letters of credit fraud scandal that has surrounded Vesttoo.
In a statement sent to Insurance Business, interim chief executive Ami Barlev said: “We believe the steps we are taking are best for Vesttoo’s long-term growth and success. Not only will they result in a strong, more sustainable capital structure, but they will provide us with the platform to aggressively pursue all parties that harmed our business.
“We fully believe that Vesttoo’s unique core technology and experienced team, coupled with the needs of the market, constitute a strong base for rebuilding the company better and stronger than before.”
With Chapter 11 protection, Vesttoo will be able to facilitate its restructuring plan and maintain normal business operations while being shielded from creditors’ claims.
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