Scheduled pre-trial hearings for the Vesttoo bankruptcy will begin on the morning of January 16 in the US Bankruptcy Court for the District of Delaware.

The court has allowed creditors of the Israeli insurtech to “investigate the acts, conduct, assets, liabilities, and financial condition of the debtor, the operation of the debtor’s business and the desirability of the continuance of such business, and any other matter relevant to the case or to the formation of a plan”.

Creditors have made claims for billions of dollars after alleged fraudulent letters of credit to the estimated value of more than $3.3 billion were discovered, toppling a company that had set up an office in Bermuda, which has now been closed.

The company was a fintech start-up, bringing new sources of capital into the insurance market. After raising $80 million, the company soared to a billion-dollar valuation, but things began unravelling when allegations surfaced that fraudulent letters of credit had been used on its platform.

Vesttoo was set up as a marketplace for non-CAT insurance-based risk transfer and investments. It was to provide insurance-linked investments to asset managers while enhancing liquidity in the life and P&C insurance markets.

Creditors have successfully sought to conduct discovery against Vesttoo’s US banker, the Truist Financial Corporation, an American bank holding company headquartered in Charlotte, North Carolina.

Another court hearing was pencilled in for the afternoon of February 20.