Liquidators Ernst & Young are suing Bermuda Fire Insurance Co. Ltd.'s five former directors who sat on the finance committee, auditors Coopers & Lines, and legal advisor Conyers Dill & Pearman for damages over the company's collapse in 1993.

The liquidators are attempting to seize ownership in BF&M Ltd. from current shareholders who received a share dividend in the company. Bermuda Fire was split in two in 1991 leaving the company with the unprofitable international business while newly created company BF&M Ltd. held the profitable domestic business.

At the time Bermuda Fire shareholders received a special share dividend in BF&M. Bermuda Fire went into liquidation in 1993 owing about $450 million to international creditors.

The liquidators claim the 1991 split was an illegal transaction because the five former directors, their auditors and legal advisor knew or suspected Bermuda Fire was insolvent.

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.

BUSINESS BUC