The parent company of one of Bermuda's 9/11 reinsurance casualties has been successfully liquidated, allowing bank debts of $180 million to be repaid and a further $31 million to be distributed to shareholders.

Although a few assets of the former Trenwick Group remain to be settled before the company is totally dissolved, KPMG liquidators have finalised a special dividend to preferred shareholders of Trenwick's former Bermuda Class 4 reinsurer LaSalle Re, the company said in a statement.

LaSalle Re went into run-off in 2002 after suffering heavy losses as a result of exposure to the 9/11 events of the previous year.

In 2003 the entire Trenwick Group, of which LaSalle Re was a subsidiary, was placed in provisional liquidation with contingent liabilities to a syndicate of leading banks, headed by JPMorganChase, of around $180 million.

The group had little or no assets to pay its creditors or its liquidation costs.

Mike Morrison, of KPMG Advisory Limited in Bermuda, said: "We are pleased to confirm the payment of a liquidation dividend to LaSalle Re Holding's preferred shareholders of over $31 million.

"In the five years since the Trenwick Group was placed into liquidation we have been able to realise cash assets from the sale of the Trenwick Group's UK and US subsidiaries and successfully implement a solvent Scheme of Arrangement for its main operating subsidiary in Bermuda, LaSalle Re Ltd.

"At the same time, the obligations to Trenwick Group's lending banks were reduced from $180 million to zero over the course of the liquidation."

LaSalle proposed a Scheme of Arrangement with its reinsurance creditors in early 2007 and appointed KPMG as its Scheme Advisors.

The LaSalle Scheme became effective in April 2007 and in January this year LaSalle paid, in full, its final reinsurance liabilities under the Scheme.

According to KPMG the Scheme resulted in an increase in LaSalle's shareholder surplus which ultimately allowed the joint liquidators (KPMG Advisory Limited in Bermuda and KPMG LLP in England) to make the special dividend to the preferred shareholders of LaSalle Re Holdings.

Series A preferred shareholders are receiving $10.50 per preferred share as a result of the realised surplus, totally $31.5 million.

John Wardrop, of KPMG LLP in England, said: "In addition, we entered into a settlement agreement with a number of Trenwick Group's stakeholders, including its primary contingent creditors, which resulted in the crystallisation of the Trenwick Group's former Lloyd's syndicate insurance liabilities through an RITC.

"This effectively allowed the cancellation of the guarantees that the banking syndicate held over the Trenwick Group and facilitated the payment of the dividend to LaSalle Re Holdings' preferred shareholders."

KPMG said that although the payment of the liquidation dividend means that substantially all of the Trenwick Group's affairs have now been finalised it still has the benefit of a handful of contingent assets.

How much those assets are worth has not yet been ascertained.