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In a sign that the Vesttoo saga could be sped through the courts in order to liquidate the insurtech and its assets, to protect value for stakeholders and creditors while avoiding further litigation between parties, a filing by the US Trustee calls for the Chapter 11 bankruptcy case to be converted to Chapter 7.
This move could put a halt to the insurtech’s plans to sell its assets, rebrand and attempt to trade forwards it seems, as if Vesttoo’s bankruptcy moves under Chapter 7, an independent trustee would be appointed by the court with the sole goal of liquidating the firm’s assets to maximise value to pay back its creditors.
The difference to a Chapter 11 case, is that under Chapter 11 the goal is typically a restructuring.
A company under Chapter 11 can request its case be converted to Chapter 7, but in this instance it is the US trustee of the bankruptcy court that has reached a point where it does not believe the trade forward plan is viable and also wants to avoid further litigation between the committee of creditors and Vesttoo.
So the US Trustee is calling for the Vesttoo Chapter 11 to be…