Over $4.8bn in claims levelled against Vesttoo entities by bankruptcy creditors

It appears that, in aggregate, creditors to the bankruptcy of forged reinsurance letter of credit (LOC) linked insurtech Vesttoo have filed over $4.8 billion in claims against the company and its entities, which provides another signal of the ramifications of and amount of value the market feels has been lost due to the fraud.

We already knew that nearly $3.36 billion of value in standby letters of credit (LOC) for reinsurance deals are assumed to have been fraudulently created by former employees of Vesttoo.

But the claims for damages that are being levelled against the insurtech by its creditors to the bankruptcy proceedings extend far beyond this number.

Which indicates parties involved feel particularly injured by the fraud and are claiming much more than the simple value of the LOC’s that proved to be fraudulent.

While also showing that the true financial cost of the fraud at Vesttoo is particularly significant.

Court filings show that claims against the debtors and their entities amount, in aggregate, to over $4.8 billion.

Almost $3.2 billion in claims come from the joint provisional liquidators of Aon’s White Rock alone, the documents state.

Of course, as in any bankruptcy, the amount of claims that will eventually be deemed allowable is expected to be far lower.

But, the chances of getting much in the way of value back look incredibly slim now.

We previously reported that the sum total of assets, so the value that could be distributed in Vesttoo’s pending liquidation under the bankruptcy proceedings, is estimated to be below $25 million.

There’s quite a gap from there to the $4.8 billion of claims that have been made.

It seems that, creditors will be asked to vote on a bankruptcy winding-up and liquidation plan that will see little in the way of value recovery.

The reality is that no one is going to get back what they have lost due to the fraud and the issues it has caused. Some will make a recovery of sorts, while others are going to focus elsewhere and try to recover values from other parties in the chain of the affected reinsurance transactions.

Read all of our coverage of the alleged fraudulent or forged letter-of-credit (LOC) collateral linked to Vesttoo deals.