Bermuda Fire & Marine Insurance Co. Ltd. directors made the best decision they could and trusted the advice given to them by professional advisors in relation to the company's 1991 reorganisation, a former board member told a court yesterday.

David A. White, president and managing director of Knick Knack department store on Reid Street, began giving testimony yesterday in the Bermuda Fire civil case as a witness for defendant BF&M Ltd.

Mr. White testified in Supreme Court that on any major financial issues, board members were guided by the finance committee. Five members of the finance committee are being accused of fraud by Bermuda Fire's liquidator Ernst & Young.

Mr. White said he remembers the board meeting of September 21, 1990 in which the reorganisation was first discussed. He said the company had hired auditors Cooper & Lines and law firm Conyers Dill & Pearman to advise the board about the reorganisation.

Cooper & Lines, and Conyers Dill & Pearman, which are also being sued, deny that they were hired to give advice about the reorganisation. The firms claim they were only hired in their respective roles as auditor and legal advisor to the company. At issue is who is to blame if the court finds a fraud had occurred in the 1991 reorganisation.

"We relied very heavily on the professional expertise of those advising BFMIC (Bermuda Fire), given their reputation and their familiarity with BFMIC's affairs,'' Mr. Cooper said in his witness statement. "It should not be overlooked that we had probably also paid substantial sums to obtain their advice.'' In procedures being followed in the case a witness' pre-trial testimony is first submitted to the court and he is then cross examined by the other lawyers.

Mr. White said board members were satisfied by the time they approved the reorganisation that they made the best decision that could have been reached on the information available.

The decision was taken in the best interests of the company and its shareholders. He also stated that the board depended on the professional advice of Cooper & Lines and Conyers Dill & Pearman in making the share dividend in BF&M shares to Bermuda Fire shareholders.

Mr. White said it was a "great shock'' to him when the company went into provisional liquidation in 1993.

"In deciding to go ahead with the reorganisation, the directors had done their very best on the basis of the available knowledge and had taken the advice of the best qualified people to assist us in that regard,'' he said.

Earlier in the day the liquidator wrapped up cross examination of prominent Front Street retailer Peter Cooper. Mr. Cooper, managing director of family business A.S. Cooper & Sons Ltd., had earlier said he believed the reorganisation was necessary to ensure public confidence in Bermuda Fire's domestic operations, which he described as under "aggressive'' competition.

Under questioning from Clare Montgomery, lawyer for the liquidator, Mr. Cooper admitted he didn't have much recollection of Bermuda Fire board meetings he attended.

He remembered that the reorganisation was portrayed as being necessary to protect the assets for policyholders and shareholders. He said he depended on the finance committee, Cooper & Lines and Conyers Dill & Pearman for information and advice on the reorganisation.

Mr. White continues giving testimony today.

David A. White: `Liquidation a great shock' BUSINESS BUC