Vesttoo Files First Interim Report With Bankruptcy Court

Interim Report Confirms Source of Letter of Credit Allegations
September 07, 2023
Vesttoo Files First Interim Report With Bankruptcy Court
Vesttoo Files First Interim Report With Bankruptcy Court

Tel Aviv – 7.09.23 – Vesttoo Ltd. and its subsidiaries filed its First Interim Report in the United States Bankruptcy Court for the District of Delaware.  The investigation has identified that “pervasive and systemic misconduct” was engaged in by a limited set of Vesttoo executives and other third-parties outside of Vesttoo. This misconduct was shielded from the majority of Vesttoo’s employees, the Board of Directors and the insurance markets.

Ami Barlev, Vesttoo’s interim CEO noted that, “The investigation has confirmed that this scheme was confined to the following Vesttoo executives - Yaniv Bertele (former CEO), Alon Lifshitz (former CFE), Udi Ginati (former Senior Director, Capital Markets) and Josh Rurka (former Senior Director, Asian Markets), who acted with external entities such as employees of China Construction Bank and Standard Chartered.  While we obviously remain very troubled by the misconduct of those that the Company and markets placed great trust in, we are pleased that the investigation has confirmed that this scheme was confined to a small subset of the Vesttoo leadership team.

The Company’s technology platform and its core value remain strong and we intend to use it and our deeply experienced insurance professionals to emerge from this process as a trusted partner.”

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The Report was prepared to provide an update on the four core objectives of the bankruptcy cases: (1) identify the root cause of the Company’s collapse through a comprehensive internal investigation; (2) establish a process to pursue those individuals and entities that had caused the harm to Vesttoo; (3) create institutional controls to address those shortcomings found in the Company’s on-going investigation and provide timely information to regulators throughout the world; and (4) re-formulate the Company’s strategic business plan.

With regard to the investigation, the report highlights the full and transparent investigation by the  that was commenced at the direction of a Special Committee of the Vesttoo Board of Directors almost immediately after the allegations related to the letters of credit used on Vesttoo’s platform surfaced. Throughout the investigation, the investigation team was given unfettered access to Company documents and systems, as well as employees and others within the control of the Company. While the investigation is substantially complete, there are still additional interviews, documents and other information that need to be reviewed before submitting the final report.

Among the critical findings in from the investigation are that a number of former Vesttoo executives, namely Bertele, Lifshitz, Udi Ginati and Josh Rurka were directly involved in creating fake documents and forging identities.  A number of third parties were also involved in this scheme, including bank employees of China Construction Bank and other banks and individuals associated with the Company’s largest investor, a company known as Yu Po Finance Ltd. While the company initially stated that the source of the fraud is external, the evidence found demonstrates that the individuals stated above knowingly directed, instigated and engaged in the fraudulent activities themselves. The nature and extent of the conspiracy by and among the various wrongdoers took various forms.

The Report also highlights the steps that the Company has taken to ensure that appropriate institutional financial security controls are in place and to resolve contractual obligations on a commercial basis. The Report also describes the development of a commercially reasonable and achievable plan for reforming and conducting its business going-forward, named “Trade Forward.”  These efforts are being led by a Board Special Committee, which is comprised of industry veterans, Chris Gottschalk and Pasha Romanovski, and a number of the Company’s key employees.  As Mr. Barlev noted, “providing the insurance markets with evidence that the Company has strong financial controls is central to our ability to effectively re-start our business.  At that point, we can quickly move to a new business strategy that can take advantage of Vesttoo’s core strengths and respond to the demand for its services in the insurance industry.” 

Mr. Barlev also noted: “We can guarantee today that the company has embarked on a new path, after a deep identification of the factors that harmed its activity. We will act decisively in order to sue anyone who harmed the company's activities, its name and its reputation, including China Construction Bank, Yaniv Bertele, Alon Lifshitz, Udi Ginati and Josh Rurka. 

We believe that the company has significant technological, business and economic value, and through a proper process of restructuring, and conducting proper negotiations, we will be able to reach a result to the benefit of all stakeholders. This is the only way forward. We will work day and night in order to direct the company on a new business path. The company operates in a high-quality market, with tremendous business potential, and at the same time brings with it groundbreaking technology and a model of significant economic value to the insurance market.”

The Report noted that while there is no dispute that Vesttoo’s lack of institutional controls and misdeeds of those in charge and others within their circle of influence have led to substantial value destruction and mistrust in the Vesttoo platform, Vesttoo and its advisors intend to work closely with the newly-formed Committee of Unsecured Creditors in the US bankruptcy case and other key stakeholder groups to hold accountable all wrongdoers and attempt to address the other issues in the US, Bermuda, Israel and elsewhere as quickly as possible, while at the same time rehabilitating the valuable Vesttoo platform and positioning it for future success.  The Interim Report can be accessed here.

Lastly, the company can confirm that Yaniv Bertele’s attempt to install attorney Ziv Ironi to serve on Vesttoo’s board on his behalf was not accepted by the Board of Directors, and Bertele was subsequently removed from the Board.