Mr. Burleigh Arnold, deputy receiver of one of the major creditors, Transit Casualty in liquidation, said that Ernst & Young's Mr. Anthony Joaquin in Bermuda and Mr. Gareth Hughes in the UK had done an outstanding job.

Transit, a Missouri company, has put the prospective and contingent claim against BFMIC at $18.9 million, in addition to a current near $2.7-million liquidated claim.

The BFMIC liquidators are now preparing for the next creditors meeting expected early in the new year.

The liquidators are planning a scheme of arrangement for the distribution of the assets of the company, but are also investigating the 1991 transaction, or the allegations of asset stripping from BFMIC.

Mr. Joaquin said,"That investigation is ongoing. We haven't finalised the scheme of arrangement or the investigation into the 1991 transaction.

"We have finished part of the examination of a couple of the individuals.

The lawyers then have to sit down, sort through all of the evidence that has been gained from all quarters of the investigation, financial and otherwise, and then reach some determination as to the possible causes of action, reach some determination as to the likelihood of outcome and make some recommendations. We are still several months away from that.

"The scheme of arrangement. We have a sort of draft skeleton that we are working with. We have to put some flesh on that now that we know we can apply it within liquidation. That will drive some of the duties and powers that will be within the scheme. And again, we are some months away from that.'' Two weeks ago the company was ordered by the Supreme Court into liquidation after the liquidators reported that minimum adjustments to BFMIC's surplus, previously reported at the end of 1992 as $4 million, in the amount of $30 million rendered the company materially insolvent.

The also believed that further adjustments of $100 million or more may be necessary once the company's loss reserves are actuarially reviewed.

The creditors had agreed at a meeting early in December to have BFMIC put into liquidation. The creditors included Transit Casualty, ITT Hartford Insurers Group, International Insurance Company, GAS Corp., Certain Teed Corp., United States Gypsum Co. and Asbestos Claims Management Corp.

A full report to creditors will be released in January.