Vesttoo files for Chapter 11
Vesttoo is seeking Chapter 11 bankruptcy protection in a US court which will enable it to pursue legal action against those responsible for the fake collateral scandal.
Last week, Aon’s White Rock, a client of Vesttoo, petitioned to freeze the assets of Vesttoo and its subsidiaries pending arbitrations of its claims against the startup, “stemming from an apparent large-scale fraud scheme surrounding letters of credit provided by Vesttoo to collateralize reinsurance transactions facilitated by White Rock on behalf of its insurer clients.”
In a response by Vesttoo, the company writes that freezing its assets will destroy its business “by ending its ability to operate.”
“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.” – Vesttoo interim CEO Ami Barlev.