at a special general meeting (SGM) of the company yesterday.

A resolution to make the firm seek a court ruling over the legality of its structure at its own cost was overwhelmingly defeated.

The proposal by rebel shareholders was effectively defeated by the Bank of Butterfield.

The Bank holds the voting rights on 66.7 percent of the company's shares which are beneficially-owned by American brothers Scott and Bill McDonald and Bermudian Mr. Gavin Wilson.

But the matter will be resolved in court, anyway.

Immediately after the vote was over, shareholder Mr. Jeff Conyers served a Supreme Court writ on directors before they left the meeting.

Mr. Conyers is paying for a court ruling out of his own pocket in a bid to prove an allegation that Cablevision is illegally owned and controlled by non-Bermudians.

Many local shareholders are furious that 60 percent of the firm's profits automatically go to the McDonalds under a controversial consultancy agreement that only the Americans -- or a court of law -- can break.

Cablevision now faces up to two years of bitter in-fighting before the matter goes to court.

One shareholder, who did not want to be named, said: "Instead of sorting out everything simply and harmoniously, it will be turned into a war with a lot of blood letting.'' Some shareholders said they were too afraid to talk publicly because of possible repercussions which they believed could affect their business careers.

Apart from the Bank, another powerful institution caught up in the affair is law firm Appleby, Spurling and Kempe, which legally represents the company.

Rebel shareholders claim that both the Bank and AS&K have a conflict of interest over Cablevision.

One shareholder said: "AS&K is responsible for setting up the legal structure of the company. It's not in their self interest for the matter to go to court so how can they purport to offer independent advice to the company.

"If a ruling was given that the structure of Cablevision was illegal, they would be open to a law suit for negligence from the McDonalds.'' Some shareholders claim that AS&K is currently representing the McDonalds in a dispute over money involving Cablevision's president Mr. Gavin Wilson, giving rise to further conflict.

Rebel shareholders claim the McDonalds have a financial stranglehold over Mr.

Wilson which may have affected the way he has voted his shares in the past.

Mr. Wilson, who has declined to comment on Cablevision while litigation is pending, denies this.

The Bank of Butterfield has also been accused of being party to a conflict of interest.

At yesterday's SGM, the Bank was represented by one of its corporate executives, Mr. Stephen Kempe.

Some shareholders claim that the conflict arises because Mr. Kempe is also a director of Cablevision, representing shares owned by the McDonalds.

"It's an outrage,'' said Mr. Conyers. "If that's not a conflict of interest, what is?'' The Bank's role in Cablevision is held in deep suspicion by rebel shareholders.

The Bank does not own a single share in the firm yet controls it, saying it has seized a 66.7 percent share because it wants to protect loans it has made to Cablevision.

But lawyers representing rebel shareholders claim this is irregular since the loans are not in default, nor are likely to be in default since the company is now profitable.