Businesswoman Renee Edgecombe will consider appealing a Supreme Court decision that has gone against her fight to regain $100,000 she placed as an investment, plus interest.

Her lawyer, Richard T. Horseman, said, "We do have six weeks to appeal and we haven't decided if we will appeal or not.'' She may appeal a decision that fails to get any of her money back, even though Puisne Judge Justice Ground ruled that Pangaea Investment Consultants Ltd. and investment manager and advisor, John A. McNiff Sr., were in breach of their contractual duties to exercise care in relation to her investment.

In 1993, Mr. McNiff specialised in a form of investment, involving stock in US companies which exploited provisions of the Securities & Exchange Commission regulation known as Regulation S.

The provision allowed US public companies to sell their shares to non-US persons without the necessity of registration with the SEC. Such stock could then be sold in the US domestic market by the offshore buyer after a 40-day waiting period.

Mr. McNiff established a mutual fund, Offshore Investment Fund Ltd., of which Bermuda exempted company, Pangaea, is the fund manager. Mr. McNiff is Pangaea's president and CEO.

Pangaea and McNiff are the first and second defendants in the action brought by Ms Edgecombe, who is a 60 percent shareholder in investment management company, Management Resources Bermuda Ltd.

Her investment advisor, Allen Forrest, is the other principal of the company.

A US company, International Dynamic Pictures Ltd. (IDP), was identified for investment, and funds were to be advanced to IDP as a loan, which was to be converted to stock at a later date.

Ms Edgecombe said that the stock, which is now worthless, was to be sold back to the company at $4 per share.

The plaintiff authorised an additional $100,000 to follow an earlier cheque for $71,800, while under the belief that the two sides had agreed that after 40 days, she would obtain $4 per share for the stock.

Justice Ground found that McNiff provisionally agreed that the shares obtained would later be sold for $4 each as a condition for the investment by Ms Edgecombe of an additional $100,000.

But McNiff did not incorporate the new terms into the loan agreement with IDP and he claims he did not authorise a written communication from his office which confirmed to Mr. Forrest that the new terms were acceptable.

The plaintiff, Ms Edgecombe, said she relied upon the confirmation before investing an additional $100,000.

Justice Ground found that Pangaea was in breach of contract because McNiff, on behalf of Pangaea, agreed to attempt to obtain the additional term from IDP (a firm offer to buy the shares back for $4 each) and, effectively undertook not to forward any additional investment until he had done so.

A subsequent letter from Pangaea confirmed the further term had been incorporated into the original terms under which the money was being advanced to IDP. Yet the term was never incorporated into the agreement, even though Pangaea still forwarded the further funds to IDP.

The judge also agreed that McNiff had a personal and co-extensive liability in negligence.

His judgement reads: "I find that he was in breach of that duty of care in the same way, and for the same reasons, as the company (Pangaea) was in breach of its contractual duty.'' But he ruled that the plaintiff's claim for the money failed, because she did not prove that the money in dispute was hers. And on a second point, she failed to mitigate her potential loss by selling the shares when there still was a market for them.

His findings in summary were: "The first defendant (Pangaea) owed the plaintiff (Ms Edgecombe) a contractual duty not to invest the further $100,000 without first ensuring that a term as to a buy-back at $4 had been inserted in the agreement with IDP. The second defendant (McNiff) owed a similar duty of care.

"In breach of those duties, the $100,000 was invested without the term being achieved. The measure of damages for that breach would be the sum lost, and not the sum which might have been gained had the term been included.

"However, on the evidence I cannot say that the plaintiff has proved that this was in reality her money, or that the loss was in fact hers. Moreover, I find that it is probable that the plaintiff could have disposed of the shares after the breach became apparent at a profit, albeit not at $4. "That was a reasonable step which she should have taken to mitigate her loss, but which she failed to take. On either basis I find that the claim fails, and I therefore dismiss it. I see no reason why costs should not follow the event, but I will hear counsel on that if they wish.'' Ms Edgecombe is the businesswoman who led Management Resources Bermuda Ltd. in the multi-million dollar deal to purchase the 41-room Salt Kettle hotel, Glencoe Harbour Club in 1994 from Reggie Cooper, that led to planning permission to convert the ocean-side property into four condominium units.

COURTS CTS