collapse in 1993.

The liquidators are attempting to seize ownership in BF&M Ltd. from current shareholders who received a share dividend in the company. Up to 1,000 BF&M shareholders who formerly held shares in Bermuda Fire could lose their investment if the liquidators win.

The case is being heard by Puisne Judge Vincent Meerabux.

Bermuda Fire was split in two in 1991 leaving the company with the allegedly unprofitable international business while newly created company BF&M Ltd. held the profitable domestic business.

At the time Bermuda Fire shareholders received a special share dividend in BF&M. Bermuda Fire went into liquidation in 1993 owing about $450 million to international creditors.

The liquidators claim the 1991 split was an illegal transaction because the five former directors, their auditors and legal advisor knew or suspected Bermuda Fire was insolvent. They are claiming the five former directors were party to a "fraudulent transaction'' in creating BF&M, a profitable local insurer, and that Cooper & Lines and Conyers Dill & Pearman were negligent in their duties by allowing the split to go ahead.

The five former directors are William Cox, Donald Lines, Gregory Haycock, Michael Collier and Charles Collis -- now deceased. The liquidators are claiming damages against Mr. Collis' estate. Mr. Collis was also chairman of the board.

Cooper & Lines, the predecessor to partnership PricewaterhouseCoopers, was Bermuda Fire's auditors. Conyers Dill & Pearman was the company's legal advisor. Bermuda Fire's 1991 five former directors, Cooper & Lines, and Conyers Dill & Pearman have denied the liquidators' claims. The defendants say they acted in the interests of the shareholders and policyholders, who include the creditors, and maintain Bermuda Fire wasn't insolvent at the time of the split.

BUSINESS BUC