Former director of Bermuda Fire William Cox took the stand in Supreme Court yesterday, after the testimony of director Gregory Haycock was wrapped up during the morning sessions.

Mr. Cox was frank regarding his inexact memory of many details leading up to Bermuda Fire's 1991 reorganisation. "I'm embarrassed that I can't remember,'' he admitted, "but it's part of aging.'' Nor did Mr. Cox make any bones of the fact that he simply "went along with the majority'' as Bermuda Fire's management and advisers hashed out various proposals for the segregation of the company's domestic and international business.

Mr. Cox was sure and adamant, however, on one point with regard to mid-1991: "The issue of insolvency was a non-issue,'' he told Puisne Judge Vincent Meerabux. "It was not in the minds of any of us.'' Mr. Cox was responding to questions from lawyer Geoffrey Vos QC, who represents the law firm Conyers Dill & Pearman. CD&P, along with accounting firm Cooper & Lines, were among Bermuda Fire's professional advisors for the reorganisation, and are among the defendants now as liquidators Ernst & Young sue for damages over the allegedly illegal 1991 split.

The plaintiffs have contended that the directors and their advisers were aware or suspected that Bermuda Fire was insolvent at the time. But Mr. Cox told the court insolvency was an issue which "had not been in the minds of anyone present'' -- this in reference to a meeting of Bermuda Fire's finance committee on June 24, 1991.

Afternoon sessions began with a review of an April 8 finance committee meeting, at which directors Charles Collis and Donald Lines, along with Cooper & Lines chartered accountant and partner David Lines, argued favourably for transferring Bermuda Fire's business, with the exception of its ailing international operations, to a subsidiary holding vehicle, "Subco.'' CD&P representative John Collis, conversely, was in favour of a new holding company, Holdco.

Mr. Cox told Mr. Vos: "I want to be totally level with you ... I did not take sides in this conflict because I frankly was not clear on why Donald Lines was so opposed to (Holdco), or why John Collis was so in favour of it.'' Previous corporate witnesses have been grilled at length for a suggested lack of inquiry into the reorganisation's finer points.

Mr. Cox did recall having a concern than "the movement of any assets out of Bermuda Fire might give rise to a fraudulent conveyance accusation'', that some directors had "asked the professionals to address and clarify other aspects'' of the reorganisation and that "we were all concerned that whatever we did would be legal''. He was also candid about errors in the precise dates of 1991 meetings mentioned in his witness statement.

Of a June 11 finance committee meeting, Mr. Cox said he had "just accepted the advice of the professional advisers.'' Mr. Vos asked him: "The assurance that the international liabilities could be valued accurately came from Cooper and Lines?'' "Yes, we relied on them,'' Mr. Cox said. "All eyes were on the auditors'' because the directors had to be satisfied that the split was "viable and legal ... We were given that information by Cooper and Lines and we acted on it.'' However, he also conceded: "Well, I think the people who make estimates of (liabilities) are not going to be hitting the bull's-eye every time; some range of variation is to be expected.'' Turning to a June 24 meeting of the committee, Mr. Vos said: "You do remember Mr. Charles Collis objecting to the minutes of that meeting ... do you remember the terms in which he objected?'' "He said that the minute as recorded suggested that proceeding with the planned route might render Bermuda Fire insolvent,'' Mr. Cox said, "and he felt that there was no suggestion at the meeting that that was going to happen.'' "Donald Lines had indeed said the banks were going to be reluctant to underwrite a share issue by Holdco, however it was structured ... because of the problems with the unsuccessful international business?'' Mr. Vos said. Mr.

Cox said, "I do recall Donald Lines expressing that view.'' Mr. Cox also said that the reference had been "amended'' in the minutes: "I think there were one or two people who thought it might be unfortunate to leave it there, and everyone agreed.'' "Nobody at the meeting regarded it as likely or possible that Bermuda Fire would become insolvent?'' Mr. Vos asked. Mr. Cox said that they had not, and that they had agreed that "a reference to something which had not been in the minds of anyone present'' did not belong in the minutes.

The case continues today.

William Cox