Lawyers for the Vesttoo case in the United States Bankruptcy Court in the District of Delaware are back for the next hearing today.

The Zoom hearing requires them to register at least two hours in advance of the hearing.

The court has entertained a Vesttoo motion seeking to allow them to pay prepetition wages and compensation and maintain and continue employee benefit programmes; and authorise and direct banks to honour and process cheques and transfers related to the employee obligations.

Here in Bermuda, a hearing also central to the bankruptcy of Vesttoo was last week put on hold, pending the completion of a liquidator’s report.

On Friday in the Supreme Court, counsel for the Bermuda Monetary Authority requested the adjournment in the matter of White Rock Insurance, and Chief Justice Narinder Hargun scheduled a resumption date of December 1.

White Rock Insurance cells are key assets in the winding up of Vesttoo, the Israeli insurtech that failed after it was found that collateral used in some transactions appeared to have been fraudulent.

Counsel for Chaucer, the Lloyd’s insurer that may have significant exposure to Vesttoo, agreed to the adjournment but asked that “no further hearings related to the matter” take place before December 1.

Teneo, joint provisional liquidators assigned by the court in the liquidation of Vesttoo Alpha P&C, the insurtech’s Bermuda entity, expects to have a report on the liquidation completed by October 18.

Friday’s hearing was well attended, with attorneys for the BMA, Vesttoo, Chaucer and White Rock, the liquidators and interested onlookers in the courtroom.

Some drama was evident for what was an otherwise routine matter as questions were raised about sealed records and as the threat of contempt of court in Delaware hung over the proceedings.

Whether the CourtSmart court recording system was operational was discussed, with one participant noting that the blue lights on each of the microphones in the room were on, which would indicate that the system was recording.

Administrators at the court said that the computers were still down but that a temporary recording system was being improvised, though they could not say whether it was working for the hearing on Friday.

Bermuda Government IT systems have been hacked with many services offline or partly offline.

The systems failure came just ahead of a possible jurisdictional battle between Bermuda and Delaware over Vesttoo.

Dozens of Vesttoo entities are in Chapter 11 in Delaware and the bankruptcy judge on the case has ordered a stay, prohibiting any discovery on, or attempted recoveries related to, the White Rock cells, which were connected to Vesttoo’s insurtech platform.

The judge said the counsel for White Rock could attend the hearing today, but admonished them not to violate the stay order.

Vesttoo claims ownership of the cells and argues they are protected under Delaware Chapter 11 proceedings.

The Bermuda liquidators counter that the stay order under the bankruptcy does not apply to their work related to the White Rock cells.

They contend that Vesttoo has no control over the assets of the cells, that the authority belongs to White Rock and to the liquidators to the extent that they are working on behalf of the board of White Rock.

Vesttoo was founded in 2018 and registered a collateralised insurer in Bermuda in 2022. The platform started falling apart this year when the legitimacy of collateral was called into question.

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

On August 20, the BMA said that together with White Rock Insurance it would focus on pursuing maximum recovery in Bermuda courts.