Israeli insurtech Vesttoo has confirmed that both the federal court in New York and the courts in Israel have removed temporary restraining orders freezing its assets. The company has also stated that the investigation into fraudulent letters of credit (LOCs) is advanced, and that it hopes to be able to publish the results in the near future.
Yesterday, the New York court cancelled the temporary restraining order to freeze Vesttoo’s assets and placed the case on its suspense docket.
Vesttoo has confirmed this move, and also revealed that the “courts in Israel have followed suit, removing the temporary restraining order from the company’s accounts in Israel as well.”
“The proceedings moving forward will fall under Chapter 11, which is aimed at providing the company with the ability to restructure the business and rebuild while pursuing legal action,” says Vesttoo.
Vesttoo filed for Chapter 11 bankruptcy protection earlier this week, as it looked to stop legal proceedings brought by Aon’s segregated accounts and transformer structure, White Rock Insurance (SAC) Ltd., which demanded the return of $136.7 million in collateral it distributed to the insurtech company.
A previous statement from Vesttoo’s interim CEO, Ami Barlev, claimed that external factors caused the fraud crisis, and the company has today reiterated this discovery.
“We can also confirm that the investigation into the fraudulent LOCs used as collateral in the company’s transactions is in advanced stages, and the company hopes to be able to publish results in the near future.
“What we can already confirm is that the source of the fraud is external to Vesttoo, and no employees of Vesttoo UK, US, Bermuda, Japan, or other jurisdictions outside of Israel are under any suspicion of being involved in the fraudulent activities.
“We can firmly assure that Vesttoo’s remaining core team of professionals is free of any suspicion, and our company continues to operate because of these talented individuals,” says the statement.