Four years after joint liquidators began implementing a court-sanctioned scheme of arrangement for Mentor Insurance Ltd. (in liquidation), they have declared another five cents on the dollar in dividends to scheme creditors, representing a further disbursement of $21.2 million.

Joint liquidators Charles W. Kempe Jr. and Nigel J. Hamilton of Ernst & Young, moved the total distribution to scheme creditors to $275 million, representing a return of 68 cents on the dollar.

"The timing and extent of future distributions will be dependent, in large part, on our success in realising further reinsurance assets,'' they said.

In reviewing reinsurance balances recoverable, the joint liquidators noted: "Post the final filing deadline and the adjudication of filed claims, we have been able to determine, with certainty, the ultimate liabilities of reinsurers to the Mentor estate.

"The effect of admitted claims on both pro rata and non pro rata protections has been calculated and advised to reinsurers.'' Joint liquidators set due and owing balances at $2.7 million, reserves at $13.8 million and deducted $2.8 million for available set-off, leaving $13.7 million.

The liquidators this month held security of $1.4 million in connection with the reserves.

The joint liquidators said, "We are committed, with the support of the committee of inspection, to maximise the recovery of reinsurance for the benefit of scheme creditors. Sufficient reserves have been retained to aggressively pursue these debts, including, where necessary, the commencement of proceedings.'' They concluded that the scheme of arrangement has provided "a sound framework for the distribution of the bulk of the estate's assets,'' and that a further distribution will be expedited.

Scheme creditors have been informed that from June 6, 1985 to December 31, 1996, operating costs have included salaries and employee benefits of more than $10.6 million, with "other'' expenses of more than $7.8 million.

Legal fees and expenses totalled $29.4 million and joint liquidators' remuneration was put at more than $18.5 million.

Actuarial fees were less than $1.5 million, while other professional fees added up to nearly $5 million.

Costs for the committee of inspection were about $430,000 and the cost for provisional liquidation through June 1993 was more than $2.5 million.

Receipts included the maturing of existing assets of nearly $5.9 million, foreign exchange gains of just over $1.1 million, interest received of more than $16.5 million, reinsurance balances recovered of nearly $73.2 million, "other items'' of more than $40.8 million and NY Trust fund assets of close to $1.7 million.

At the end of December 1996, Mentor had $36,666,000, most of which were investments at market value.

Just under $100,000 was in operating accounts and on deposit. Sunday was the fourth anniversary of the scheme's implementation date of March 23, 1993.

Claims of $970.3 million involving 1,003 claimants were filed, prior to the June 30, 1993 final filing deadline.

After reductions of $235.8 million and rejections of $130.1 million, admitted claims totaled $604.4 million.

Discounting to December 31, 1988 reduced it by $82.4 million. And a further $18.1 million and $98.3 million were deducted for set-off amounts due to Mentor, and letters of credit drawn and associated interest, respectively.

Net admitted claims for 726 creditors settled at $405.6 million.

Only two appeals to the joint liquidators assessment of claims remain unresolved.

Available assets at June 6, 1985 were $117.6 million and net receipts, prior to dividend payments, for the period June 6, 1985 to December 31, 1996 totalled $172.9 million.

Available assets at the end of 1996 were $36.7 million, after $253.8 million (representing 63 cents on the dollar) in dividends had been paid.

Liquidators then reviewed available assets, unresolved appeals and the ongoing costs of pursuing reinsurance recoveries, and, after consulting with the committee of creditors, concluded that the further distribution of five cents on the dollar would be appropriate.