A lawyer for the Bermuda Monetary Authority has branded as “outrageous” a claim by opposing counsel that the BMA and White Rock Insurance (SAC) Ltd were acting in “collusion” in the regulatory authority’s application to withdraw its petition in the matter of the company.

Lilla Zuill, of Cox Hallett Wilkinson, was acting for Lawrence Hirsh, the liquidating trustee in the US bankruptcy proceedings of Vesttoo in Delaware, who opposed the withdrawal of the petition.

She said: “The company is no longer willing to proceed and the BMA is going along with that. We are suggesting collusion between the company and the BMA.”

Ms Zuill added: “That is a strong thing to say.”

Larry Mussenden, the Chief Justice, interjected and said: “I was going to say that.”

Jeffrey Elkinson, in his reply on behalf of the BMA, said: “For my friend to use the expression ‘collusion’ between the company and the BMA is outrageous.”

Mr Justice Mussenden dismissed the petition after a two-hour hearing today in the Supreme Court.

He also did not grant Mr Hirsh’s application to stop the BMA’s application.

The effect of Mr Justice Mussenden’s decision is that White Rock Insurance (SAC) Ltd is no longer in provisional liquidation for restructuring purposes.

Ms Zuill said Mr Hirsh represented the former unsecured creditors of Vesttoo debtors. The vast majority by dollar value are insurance companies that were White Rock cedants.

She said Mr Hirsh is also the wind-down officer for Vesttoo Ltd and 48 affiliated debtor entities, the Vesttoo debtors.

Today’s matter was a continuation of the case that began last Friday.

The BMA, together with White Rock SAC, had jointly agreed to the appointment of joint provisional liquidators in the matter last August with a focus on pursuing maximum recovery for the insured and reinsured impacted by the alleged fraud involving Vesttoo-related segregated accounts.

Mr Justice Mussenden said he would provide written reasons “as soon as possible”.