the move of a Massachusetts insurer to Bermuda nearly two years ago are awaiting a Massachusetts judge's decision in the Supreme Judicial Court for Suffolk County. In a real life clash of the titans, corporate powerhouses are locking horns in the complex case of EMLICO, the Electric Mutual Liability Insurance Co., an insolvent insurer founded by influential General Electric Co.

The 70-year old EMLICO moved here in the summer of 1995, less than four months before it said it was overwhelmed by GE's insurance claims and was insolvent by hundreds of millions of dollars. It successfully petitioned the Bermuda Supreme Court to be liquidated.

GE's complex insurance claims against EMLICO involve some of the so-called Superfund sites, US toxic dump sites, that the US legislature has tried for years to help corporate America clean up.

The costs are monumental and some environmentalists believe too little is getting accomplished with respect to the actual clean up.

Here in Bermuda, local professionals are involved in EMLICO's liquidation.

EMLICO's international reinsurers allege fraud by GE and its insurer.

Some believe, too, that this will be a test of Massachusetts' and Bermuda's regulatory environments. Allegations are already flying that regulators in both jurisdictions were deceived by the two companies. The allegations have been denied by Registrar of Companies, Kymn Astwood.

GE's insurance claims involve hundreds of millions of dollars for hundreds of clean-up sites, and by their own estimate, potentially billions of dollars for future claims.

The reinsurers claim GE and EMLICO schemed to have the reinsurers pay the bill by moving the company to Bermuda where regulations favour creditors more, thus allowing GE to control the liquidation.

GE and EMLICO liquidators say the reinsurers are just trying to avoid paying their bill. The Massachusetts regulators have proposed a settlement agreement that would allow the Bermuda liquidation to go ahead, while a US receiver is established in Boston to assist the Bermuda liquidators. They are asking the court to ratify this agreement, over the objections of reinsurers like Kemper Re, a litany of Lloyd's Underwriters and Hannover Re, who want EMLICO returned to the US to face the allegations of fraud. There is no indication how many weeks it will take for the judge to sift through the divergent views of right and wrong, and decide if the proposed agreement will live or die.

What follows are some of the significant arguments, taken from the court filings, that are right now being studied by Justice Greaney.

COURTS CTS