One of Markel Group’s subsidiaries has been appointed to the creditors committee in the Vesttoo Ltd. Chapter 11 bankruptcy case, according to an announcement made by the company on Thursday.

Markel Bermuda Limited (MBL) stated that it participated in two reinsurance transactions with White Rock Insurance (SAC) Ltd.’s segregated account platform. These transactions were entered into for the benefit of a Vesttoo affiliate.

Under these transactions, Markel Bermuda (MKL) transferred collateral protection insurance risk to the segregated account, which was required to provide reinsurance collateral to MBL. Letters of credit were used as collateral backstops in case claims were not paid for the underlying policies.

Both letters of credit, one for $50 million and the other for $77.75 million, were later discovered to be fraudulent. An affiliate of Vesttoo acted as the applicant on behalf of White Rock, with MBL as the designated beneficiary.

Vesttoo and its various affiliates filed for voluntary Chapter 11 bankruptcy on August 14 and 15, 2023. Markel Bermuda (MKL) stated that it is exploring possible remedies against third parties, including Vesttoo, to mitigate or eliminate any potential losses resulting from the fraudulently issued letters of credit.

Markel Group Inc. (MKL) does not anticipate that the losses associated with these letters of credit will have a significant negative impact on its financial condition, liquidity, or operating results.