An application by the Bermuda Monetary Authority to withdraw its petition in the matter of White Rock Insurance (SAC) Ltd was adjourned by the Supreme Court of Bermuda to allow for argument opposing the withdrawal.

Lawrence Hirsh, the liquidating trustee in the US bankruptcy proceedings of Vesttoo in Delaware, opposes the withdrawal of the petition.

Lilla Zuill and David Kessaram of Cox Hallett Wilkinson represented the liquidating trustee before Larry Mussenden, the Chief Justice.

Ms Zuill said the liquidating trustee was a party to the proceedings, having filed a notice of intention to appear on June 13.

She said she needed time to prepare for a hearing to oppose the withdrawal, and sought an adjournment of “at least two weeks”.

Earlier, Jeffrey Elkinson of law firm Conyers had set out the position of the BMA, which 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 affected by the alleged fraud involving Vesttoo-related segregated accounts.

Mr Elkinson said the petition had been brought in the public interest, and that the winding-up of the company was not considered inevitable at that time.

He told the court that, of the list of cells and cedants affected, 68 per cent had been fully resolved and another 14 per cent were pending.

Mr Elkinson said: “The authority should be proud of what it has achieved as that was the purpose of the public interest petition.”

He asked why the petition, issued in Bermuda for the public interest, should be used for commercial advantage by a cedant in another jurisdiction.

“Commercial interests are not the purview of the authority in these circumstances.”

He sought an order that the petition be dismissed by the court.

Kyle Masters, of Carey Olsen, representing White Rock SAC, said his client supported the BMA’s position. He said: “It’s a public interest petition.”

Mr Masters said that the JPLs, since they were appointed, have had a “burn rate of something like $200,000 per week”.

“Even a short continuation, which we do not support, would result in the incurring of significant costs on the part of the company,” Mr Masters added.

Katie Tornari, of Marshall, Diel & Myers, representing the joint provisional liquidators of White Rock SAC, said her client was neutral with respect to the dismissal of the petition, adding that there was “some merit in a very short adjournment”.

Mr Justice Mussenden adjourned the matter until Wednesday, at which time he will hear Ms Zuill’s submissions.

Counsel for the other parties will have a right of reply.