Shareholders of BF&M will today decide on whether to accept a deal on the table that will pay the liquidators of the Bermuda Fire & Marine Insurance Company Ltd. $35 million.

If the 1,000 or so shareholders vote to carry the motion then they will not lose their investment nor have to pay out any money for the case.

In the deal BF&M accept no liability for wrongdoing. The shareholders will also not be able to either sue or be sued in the future if they accept the terms and conditions of the deal.

On November 30, BF&M offered an out-of-court settlement to the liquidators.

The other parties being sued are believed to have paid out an estimated $15 million to settle.

BF&M said they had agreed to the out of court settlement because of the soaring legal costs, estimated at $35 million to date.

Now the shareholders will decide whether to accept the deal, which will mean an end to the case with no further chance of going back to court.

The Bermuda Fire case has rocked the insurance world and seen the good and the great of Bermuda put on the witness stand. To date the case has cost an estimated $35 million.

The liquidators Ernst and Young were suing Bermuda Fire's five former directors who sat on the finance committee, accountants Cooper & Lines and legal advisors Conyers Dill & Pearman for damages over the company's collapse.

The court case, which started in May this year, was based on Bermuda Fire being split into two separate businesses in 1991.

BF&M was created for the profitable domestic business, while the less attractive international business was left with Bermuda Fire.

By 1993 Bermuda Fire went bust owing huge debts internationally of about $450 million.

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 have said they acted in the best interests of the shareholders and policyholders, who include the creditors, and maintain Bermuda Fire was not insolvent at the time of the split.

The liquidators claimed was that the directors, accountants and legal advisors knew or suspected that Bermuda Fire was insolvent when the businesses were separated, taking the cream of the business for themselves.

The liquidators were therefore negligent in their duties in creating BF&M, the profitable local insurer.

The case was predicted to drag on for another year in Bermuda, with the prospect of years of further appeals in London.

If the deal goes ahead, trading of BF&M is expected to resume trading on the Bermuda Stock Exchange on December 17.

Trading was suspended in 1995 because of shareholders involvement in the case.

Shares were last traded at $6.50.

If accepted shares in the short term will be worth less than they were before the case started.

Lt Col Michael Darling, BF&M's Chairman said the value could fall as much as nearly $11 a share.

He said: "The effect of the $35 million settlement on the company's balance sheet at December 31, 1999 will be to decrease shareholders' equity by a like amount while the option granted to Bermuda Fire to subscribe for common shares in the company will have no effect on that balance sheet.

"The payment of the $35 million will reduce earnings for the year ending 31 December, 1999 by a like amount and both earnings per share and book value per share are expected to decrease by $10.88 in 1999 as a result of this one time charge.'' BUSINESS BUC