Liquidators seek 75 percent of shares By Doug Ashbury Joint liquidators of defunct Bermuda Fire & Marine Insurance Company Ltd. want control of about 75 percent of BF&M Ltd.'s existing common shares, BF&M said in a release late yesterday afternoon.

And the company said a shareholders association has been formed to fight efforts by the liquidators to gain control of the shares.

The shares were received by the defendants in connection with the 1991 spin-off of BF&M from Bermuda Fire, a move which is being challenged by the liquidators.

The remaining shares are held by individuals who purchased the securities after the reorganisation.

Liquidators are not seeking to reclaim the value of the shares, BF&M said. No other shares are subject to the liquidators claims and there is no claim in damages against the defendant shareholders, BF&M said.

"BF&M very much regrets that the liquidators have seen fit to pursue claims against a large group of innocent shareholders, particularly in circumstances where the validity of those claims is very doubtful.'' Bermuda Fire & Marine spun off BF&M in 1991 in an effort to separate the company's profitable domestic business and its loss-making international business, which had been hit by heavy claims.

Shareholders have formed an association "to coordinate the defence of the claims,'' BF&M, which supports and encourages the shareholders to join, said.

Former Premier Sir John Sharpe will lead the association which also includes Mr. Michael Darling, Mr. Charles Mann, Mr. Francis Patterson and representatives from Bank of Bermuda and Bank of Butterfield trust companies who act as custodians for many shareholders.

The association will also finance the defence of claims brought by the liquidators and certain creditors.

Joining the association means it will conduct the defence on the shareholders' behalf, said BF&M.

"Unless shareholders take steps to defend themselves, there is a risk that their shares will be forfeited to the liquidators without any compensation,'' BF&M said.

Puisne Judge Mr. Justice Meerabux ruled on November 17 that the liquidators could press to seek damages from BF&M shareholders.

On Wednesday, the Appeals Court decided not to grant an injunction to BF&M which would have stayed liquidators from pressing their case against the shareholders.

The Appeals Court yesterday gave its reasons for the ruling.

"We doubt loss of confidence in BF&M,'' Mr. Justice Cons, presiding with Mr.

Justice DaCosta and President of the Court of Appeal Sir James Astwood, said yesterday.

On Wednesday, Mr. Justice Cons said it seems unlikely the average policyholder would move his policy elsewhere if there is a dispute among shareholders as to ownership of the company.

BF&M lawyers were asking for the injunction until leave to appeal efforts commence March 4.

The court also felt that by granting the injunction it may open itself up to "abuse'' for cloaking proceedings in secrecy.

In yesterday's decision, the Appeals Court also traced some history of the events surrounding the creation of BF&M and legal action by liquidators Ernst and Young.

Bermuda Fire joint liquidators are Mr. Tony Joaquin and Mr. Gareth Hughes with Ernst and Young in Bermuda and London respectively.

Lawyer Mr. David Oliver QC, representing the corporate defendants -- the BF&M Group of Companies -- and one other defendant, argued Wednesday that the injunction was necessary to preserve public and investor confidence in BF&M.

"We are concerned over the period (leading to the) application for leave to appeal that no further steps be taken to damage the business of the plaintiff,'' Mr. Oliver had said.

"To some extent these matters are already before the public,'' said Justice Mr. Cons. "We are concerned with two public companies (that have traded) on a public stock exchange,'' he said.

Trading in BF&M on the Bermuda Stock Exchange was suspended on October 26.