Court overturns Vesttoo's seizure request against founders and execs
Court overturns Vesttoo's seizure request against founders and execs
District Court in Tel Aviv rules in favor of co-founders Yaniv Bertele and Alon Lifshitz, dismissing seizure bid
The District Court in Tel Aviv dismissed outright the procedure initiated by insurtech company Vesttoo against the company's co-founders Yaniv Bertele and Alon Lifshitz. Additionally, the court ordered the immediate removal of the foreclosures imposed on the founders and executives Udi Ginati and Josh Rurka, and Tal Ezer, who provided services to the company. It also stated that the company is not allowed to submit a similar request again.
Last September, at the same time as the opening of the company's bankruptcy proceedings in the U.S., Vesttoo, led by interim CEO Ami Barlev, initiated legal proceedings against company executives.
These unilateral foreclosures were the result of Vesttoo's request to seize NIS 768.6 million ($209 million) from Bertele, who served as the company's CEO, and Lifshitz, who served as Chief Financial Engineer. In addition, the court was asked to seize NIS 247 million ($67 million) from Udi Ginati and Josh Rurka, two former executives at the company, and Tal Ezer, who provided services to the company. According to the company and in accordance with the findings of an investigation carried out by financial and risk advisory firm Kroll, the respondents committed serious acts of fraud and forgery while misleading both the insurance companies and sub-insurers as well as the company's board of directors and its employees.
On Lifshitz's behalf, attorneys Nati Haim and Guy Azulay from the Agmon with Tulchinsky law firm stated: "This is an important and fair decision, which outlines the limits of the decree for the use of the foreign procedure within the framework of insolvency proceedings and the appropriate framework for the use of the tool of a request for the provision of instructions. As we believed from the beginning, the foreclosures imposed on Alon were fundamentally unfounded, since the initiators of the procedure did not present any apparent evidence against Alon. This decision also serves to anchor the property rights of the parties to the proceedings, especially in the preliminary stage where the evidence has not yet been fully clarified."
Lawyers Merav Bar-Zik and Tal Shapira, representing Yaniv Bertele, said that they welcome the court's decision. "From the beginning, we argued that this was an unfounded request that had no place to be submitted, and we are happy that the court accepted this position in full, and ordered the deletion of the proceedings against Bertele already at this preliminary stage."
Lawyers David Forer and Limor Levy, representing Ginati and Rurka, respectively, stated that they welcome the court's decision. "The lawsuit filed by the Vesttoo company is unfounded, and Judge Brenner did the right thing when he dismissed it outright. The solution for the Vesttoo company will not come from resorting to unfounded legal procedures."
The company stated: "The company accepts and respects the decision of the honorable court. We are dealing with a mainly procedural decision which discusses the type of proceeding filed and the filing procedure. The decision itself does not discuss the vast and conclusive evidence that the investigation report brought up against the defendants (and soon the final investigation report will also be submitted showing all the evidence that was found), but mainly discusses the legal issue of the submission procedure. The decision itself does not change a thing in relation to the scope of the documented evidence found as part of the investigation. The court ruled that since the lawsuit deals with the most serious acts of fraud and forgery committed by Yaniv Bertele, Alon Lifshitz, Udi Ginti, Josh Rurke, and Tal Ezer around the world, the lawsuit should be settled in a normal civil procedure and not in a shortened and quick procedure taken by the company."
