A declaration in a Delaware bankruptcy court on Wednesday was in support of the employment of a Bermuda King’s Counsel to represent Vesttoo, the Israeli insurtech that has filed for Chapter 11 protection.

Only this week, the court agreed that Vesttoo could use funds to employ professionals to represent it in matters that did not directly relate to the administration of the Chapter 11 cases.

Bermuda lawyer Delroy Duncan KC has informed the court that he has agreed to provide legal counsel in connection with White Rock (Bermuda) and the Bermuda Monetary Authority.

As the professional involved, he stated in a petition to the court: “The professional intends to bill the debtors for professional services rendered in connection with the Chapter 11 cases, in accordance with the Ordinary Course Professionals Order, with such bill to include compensation for services based on the hourly rates set forth below, plus reimbursement of actual and necessary expenses and other charges incurred by the professional.

“The principal attorneys and paralegals or other professional designated to represent the debtors and their current standard rates are: Delroy B. Duncan KC — $975 per hour; Ryan Hawthorne — $675 per hour; and Janet Waver — $200 per hour.

Mr Duncan is the managing director of Trott & Duncan on Brunswick Street, Hamilton.

Vesttoo’s bankruptcy case is being heard in the United States Bankruptcy Court for the District of Delaware, with Judge Mary Walrath presiding.

Meanwhile, the reinsurance publication Artemis is reporting that sources say that less than $25 million may be recoverable under Vesttoo’s bankruptcy proceedings, which suggests creditors could be out of pocket by hundreds of millions of dollars or more.

Artemis said: “It’s not clear whether the estimate for the amount of assets that could be distributed to creditors includes any sum from a potential sale of any technology or intellectual property from the beleaguered insurtech.

“We have been told that such a sale process, which appeared on the cards only a few weeks ago, is now looking less likely, with Vesttoo and the creditors instead thought likely to push forward towards a rapid liquidation again.”

The publication reported in September: “Almost $3.36 billion of standby letters of credit are assumed to be fraudulently created — $2.81 billion purportedly from China Construction Bank; $362.5 million purportedly from Standard Chartered Bank; and $186 million purportedly from Santander.

“Precisely how much reinsurance limit those [letters of credit] were supposed to be backing is less clear. But at least that sum seems the most likely answer.”

Beleaguered Vesttoo was founded in 2018 and registered a collateralised insurer in Bermuda, Vesttoo Alpha P&C, in 2022, saying it was central to the business model underpinning the entire company.

The insurtech platform started falling apart this year when it was found that a number of LOCs, or collateral used in some transactions, appeared to have been fraudulent.

In early August, Vesttoo Alpha P&C was placed into liquidation by the BMA, and Charles Thresh and Michael Morrison, of Teneo, were appointed to be joint provisional liquidators.

Later in the month, dozens of Vesttoo-related companies filed for bankruptcy protection in Delaware, and on August 20, the BMA said that, together with White Rock Insurance (SAC), it would focus on pursuing maximum recovery in the courts in Bermuda.