Bankruptcy court approves Vesttoo liquidation plan

Plan satisfies requirements of Bankruptcy Code

Bankruptcy court approves Vesttoo liquidation plan

Insurance News

By Terry Gangcuangco

The bankruptcy court in Delaware has approved the liquidation plan for Vesttoo following the insurtech’s collapse due to letters of credit fraud.

“The evidence in support of the plan that was proffered or adduced at the combined hearing, and the facts and circumstances of these Chapter 11 cases, establish that each holder of allowed claims or interests in each class will receive or retain as much or more value under the plan on account of such claim or interest, as of the effective date, than the amount such holder would receive if the debtors were liquidated on the effective date under chapter 7 of the Bankruptcy Code,” reads part of the court document seen by Insurance Business.

“As a result, the plan proponent has demonstrated that the plan is in the best interest of creditors and equity holders and the requirements of section 1129(a)(7) of the Bankruptcy Code are satisfied.”

The creditors’ committee, which represents the interests of the unsecured creditors of the debtors in the Chapter 11 cases, consists of Clear Blue Specialty Insurance Company and its subsidiaries,, Markel Bermuda Limited, Proventus Holdings, and United Automobile Insurance Co.

The court noted on February 29: “The plan and the documents included in the plan supplement provide adequate and proper means for the plan’s execution and implementation, including, but not limited to: (a) the cancellation of certain existing agreements, obligations, instruments, and interests; (b) the appointment of the wind down officer to effectuate the wind down of the wind down debtors in accordance with the wind down agreement and the plan; (c) the establishment and funding of the liquidating trust pursuant to the liquidating trust agreement and the transfer of the liquidating trust assets to the liquidating trust free and clear of all liens, claims, charges, or other encumbrances, subject only to the liquidating trust interests and except as set forth in Article XII.L.3 of the plan; (d) the execution, delivery, filing, or recording of all contracts, instruments, releases, and other agreements or documents in furtherance of the plan; (e) the authorisation, approval, and entry of corporate actions under the plan; and (f) the authorisation for the wind down officer and the liquidating trustee, as applicable, to take all actions necessary to effectuate the plan. Accordingly, the plan satisfies the requirements of section 1123(a)(5) of the Bankruptcy Code.”

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