GTE closing leaves some Bermudians out of work
The captive of telecommunications giant GTE Corp closed its doors in Bermuda for good yesterday leaving several employees jobless.
Management in the Bermuda office -- set up in 1976 -- refused to comment on the closure, although one distraught staff member leaked some details to The Royal Gazette .
GTE Re was originally incorporated in Bermuda but in 1994 moved its site of incorporation to Vermont.
A spokeswoman from the company's Irving, Texas headquarters played down the issue yesterday, insisting a majority of the 22 staff had been happily absorbed into Marsh management services company, formerly Marsh & McLennan.
Most of the workers were Bermudians.
She said Marsh was to take-over running the captive for GTE and employees had been warned as far back as February so they could prepare for the shift.
"We are a telecommunications company and we have been divesting several of our non-core businesses to concentrate on our main business,'' she said.
"That's where our expertise is.'' Marsh president Andrew Carr said GTE had simply decided to revert to out-sourcing the management of its captive, as it did several years ago.
Mr. Carr declined to comment on GTE's reasons for the re-structuring.
But he confirmed several GTE Re staff would be joining Marsh ranks -- although he would not specify how many had been left out in the cold by the deal.
GTE Re hit the headlines last year when it became ensnared in a nasty legal wrangle with Belvedere Insurance Co.
Belvedere's wholly-owned subsidiary, Belvedere Underwriting Agents Ltd., wrote business on behalf of GTE Re from 1980 to 1983, but Belvedere stopped writing new business in 1994 and began an orderly run-off.
GTE Re managed the run-off business written on its behalf by BUAL.
Eventually Belvedere brought a number of claims against GTE and the dispute went to arbitration over a reported $9-million bill that Belvedere claimed for purported underwriting management and run-off services performed for GTE.
In a counterclaim, GTE petitioned the Supreme Court to wind up Belvedere and the Official Receiver was appointed interim provisional liquidator.
The arbitration proceedings were settled in September with the decision that Belvedere was insolvent.
And the Official Receiver applied to the Supreme Court to liquidate the company and appoint joint provisional liquidators.