{"id":1848,"date":"2025-08-14T10:30:10","date_gmt":"2025-08-14T10:30:10","guid":{"rendered":"http:\/\/www.xinetica.com\/?p=1848"},"modified":"2025-08-14T14:28:37","modified_gmt":"2025-08-14T14:28:37","slug":"vesttoo-bankruptcy-creditors-file-lawsuit-against-aon-and-china-construction-bank","status":"publish","type":"post","link":"http:\/\/www.xinetica.com\/index.php\/2025\/08\/14\/vesttoo-bankruptcy-creditors-file-lawsuit-against-aon-and-china-construction-bank\/","title":{"rendered":"Vesttoo bankruptcy creditors file lawsuit against Aon and China Construction Bank"},"content":{"rendered":"

The Vesttoo Creditors Liquidating Trust, an independent fiduciary appointed by the U.S. Bankruptcy Court for the District of Delaware, has filed a complaint in the Court against Aon, China Construction Bank, and certain entities and individuals for alleged fraudulent conduct and other wrongdoing that “inflicted devastating losses upon the insurance industry” and led to Vesttoo\u2019s bankruptcy.<\/p>\n

\"vesttoo-court\"For those unaware, the Israeli insurtech collapsed in 2023 after it was revealed that over $4 billion in letters of credit (LOCs) backing reinsurance deals were fraudulent. A range of court actions are underway, including Aon\u2019s direct legal action against China Construction Bank.<\/p>\n

With this in mind, Vesttoo bankruptcy creditors have now alleged that Aon knowingly sold its Collateral Protection Insurance (CPI) product to Vesttoo and other insurance and reinsurance companies based on “blatantly false” representations.<\/p>\n

“Marketed as a breakthrough insurance mechanism that delivered accurate intellectual property (IP) valuations, in reality, Aon\u2019s CPI product was flawed at its core and built on fraudulent representations of Aon\u2019s capabilities and undisclosed conflicts of interest. Despite internal awareness that its CPI product was inherently risky and incapable of delivering on Aon\u2019s promises, Aon aggressively scaled the offering, inducing Vesttoo and others into assuming billions of dollars of insurance and reinsurance risk,” the Vesttoo Creditors Liquidating Trust alleged.<\/p>\n

The Trust, established as an independent fiduciary under the U.S. Bankruptcy Court to pursue recovery claims on behalf of creditors harmed by Vesttoo\u2019s collapse, also alleged that Aon ignored “glaring warning signs” of a scheme by a small group of co-conspirators to produce forged LOCs and convince Vesttoo they were real.<\/p>\n

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It further stated that Aon ignored red flags surrounding Vesttoo\u2019s LOCs fraud to continue scaling its CPI product, adding that Aon\u2019s CPI transactions were the primary cause of Vesttoo’s downfall and the industry-wide chaos they created.<\/p>\n

“Prior to its involvement with Aon\u2019s CPI deals, Vesttoo\u2019s insurance and reinsurance counterparties had never drawn on Vesttoo-obtained LOCs,” the Trust said.<\/p>\n

Meanwhile, the new lawsuit additionally seeks damages from China Construction Bank and the co-conspirators in the LOCs forgery scheme for allegedly fabricating over $2.8 billion in LOCs that proved to be entirely illusory.<\/p>\n

Lawrence Hirsh, Liquidating Trustee, commented, \u201cVesttoo\u2019s collapse was the direct result of Aon and CCB\u2019s fraudulent conduct. Aon knew there were serious flaws in its CPI product, yet continued to falsely market it as the gold standard in intellectual property valuation.<\/p>\n

“Aon also steered its riskiest transactions to Vesttoo while ignoring glaring red flags regarding Vesttoo\u2019s collateral providers, reaping tens of millions in fees while enabling a scheme that destabilised the global insurance market.<\/p>\n

“Absent Aon\u2019s false representations about its CPI product, Aon\u2019s failure to satisfy its due diligence obligations to Vesttoo and its counterparties, and CCB\u2019s facilitation of billions in forged letters of credit, Vesttoo\u2019s business would not have relied on the misvalued deals and forged collateral that led to its demise.\u201d<\/p>\n

\u201cAs an independent fiduciary appointed by the Court, the Trust is seeking to hold Aon, CCB, and CCB-enabled co-conspirators accountable for the manipulation of and fraud against Vesttoo. This litigation represents an initial step toward justice for insurers and reinsurers who were victimised by Aon\u2019s and CCB\u2019s actions.\u201d<\/p>\n

It’s worth noting that Vesttoo bankruptcy creditors have also launched several adversary cases against well-known re\/insurance industry service providers that worked on Vesttoo transactions, seeking to recover some of the monies paid to them.<\/p>\n

In response to the new lawsuit, Aon stated, \u201cThis lawsuit represents a perverse attempt by Vesttoo\u2019s bankruptcy estate to shift responsibility for Vesttoo\u2019s deliberate fraud to Aon, one of the fraud\u2019s biggest victims.<\/p>\n

“Vesttoo has already acknowledged in its own investigative report that executives of the company, along with other co-conspirators, were responsible for the fraud and intentionally sought to mislead Aon and other impacted parties.<\/p>\n

“We will vigorously defend Aon against these meritless claims and continue to take steps to both maximise recoveries for our clients and strengthen standards across our industry.\u201d<\/p>\n

The post Vesttoo bankruptcy creditors file lawsuit against Aon and China Construction Bank<\/a> appeared first on ReinsuranceNe.ws<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Vesttoo Creditors Liquidating Trust, an independent fiduciary appointed by the U.S. Bankruptcy Court for the District of Delaware, has […]<\/p>\n","protected":false},"author":1,"featured_media":1850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[14],"tags":[],"_links":{"self":[{"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/posts\/1848"}],"collection":[{"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/comments?post=1848"}],"version-history":[{"count":3,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/posts\/1848\/revisions"}],"predecessor-version":[{"id":1852,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/posts\/1848\/revisions\/1852"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/media\/1850"}],"wp:attachment":[{"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/media?parent=1848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/categories?post=1848"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/tags?post=1848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}