Vesttoo's collapse to cost Meshulam Levinstein real estate company 5.4 million NIS
Vesttoo's collapse to cost Meshulam Levinstein real estate company 5.4 million NIS
Insurtech company Vesttoo, which rented office space in Levinstein Tower for a quarter of a million shekels per month, has collapsed due to suspected embezzlement of billions of shekels.
The collapse of Vesttoo will cost the Meshulam Levinstein Group about 5.4 million NIS ($1.3 million), according to a Calcalist analysis. On September 30, the real estate company announced that it would sell one of its most prominent assets - the Levinstein Tower on Begin Street in Tel Aviv. This is a result of Vesttoo's imminent departure, which had rented approximately 1,500 square meters of office space in the Tower.
Levinstein Tower is used for offices and commercial purposes, with 33 stories and approximately 1,000 square meters per floor. Vesttoo had leased the 28th floor of the building. A senior figure in the real estate industry told Calcalist that Vesttoo paid Levinstein until the end of October. However, Vesttoo's operations team announced last week that the insurtech company would be vacating the building as part of its cost-cutting measures and expects to cease rental payments in the near future.
It won't be easy for Levinstein to find a replacement tenant under the same conditions as Vesttoo, which had rented the offices in the Levinstein Tower for 250,000 NIS ($62,7000) per month or 170 NIS ($42) per square meter per month. In 2021, considered a record year for real estate in Tel Aviv, the average cost of office rent on Menachem Begin Street, where Levinstein Tower is located, was 138 NIS ($34) per square meter per month.
Levinstein has informed investors that Vesttoo's eviction is the result of legal and regulatory proceedings taken against Vesttoo. Calcalist revealed in July that the company was alleged to have embezzled billions of dollars.
The allegations assert that investors who used the company's platform were able to purchase the risk from insurance companies by presenting fake guarantees, which Vesttoo's system either did not check or did not detect. Since then, investigations have been opened against the company in the USA and its founders Yaniv Bertele and Alon Lifshitz, who served as CEO and Deputy CEO respectively until August.
In September, the court approved a foreclosure of 90 million NIS ($22.5 million) on the founders' assets and 27.6 million NIS ($6.9 million) for two former employees. This follows a lawsuit filed by the company itself against its founders and former executives. Vesttoo's lawsuit sought an original amount of 768.6 million NIS ($193 million).
