Independent Senator Jeannette Cannonier will testify she trusted the guidance of the five directors on Bermuda Fire & Marine Co. Ltd's finance committee in board discussions leading up to the disputed 1991 transfer of profitable assets to BF&M Ltd., it was revealed in court yesterday.

Ms Cannonier's preliminary witness statement was cited by Supreme Court Judge Vincent Meerabux, who wondered whether she was indicating Bermuda Fire's board of directors had been "hijacked'' by five powerbrokers.

Ms Cannonier was on Bermuda Fire's board when BF&M was created, and when a special share dividend in the new entity was handed out to shareholders. The shares were estimated to be worth $33.2 million at the time.

She is currently on the board of BF&M and is a retired Bank of Butterfield executive.

BF&M's defence is that the company did not receive assets though a fraud committed by the five former directors and the decision to hive off Bermuda Fire's profitable assets was a good decision that ultimately benefited international policyholders.

BF&M, along with the company's shareholders, the five directors, Cooper & Lines and Conyers Dill and Pearman are being sued for damages over the 1993 collapse of Bermuda Fire by the liquidators and policyholders.

Part of BF&M's defence rests on the argument the full board was responsible for making what company lawyer Elizabeth Gloster said was "bonafide'' business transaction based on the professional advice of auditors Cooper & Lines and law firm Conyers Dill & Pearman.

Ms Gloster was disputing claims by Bermuda Fire liquidator Ernst & Young that chairman Charles Collis, William Cox, Gregory Haycock, Michael Collier were the "directing mind and will'' of the board. Mr. Collis died last year.

She argued the five were only part of a 17-member board who made all the company's decisions. She argued that any fraudulent intent attributed to the five former directors is not relevant to any claim of damages against BF&M.

The liquidator would have to prove the board as a whole "simply followed the lead of the individual defendants and were misled by them as their innocent dupes''.

This, she said, could not be the case as minutes of board meetings show other directors asking questions and requesting more information about the split.

Split was `good business decision' The snippet from Ms Cannonier's preliminary witness statement was brought up by Mr. Justice Meerabux when he questioned Ms Gloster about the claim.

"Are you saying there was no hijack of the board?'' he asked. "There was no kitchen cabinet?'' Ms Gloster said the liquidator had not seemed to make such a claim in the suit.

Mr. Justice Meerabux then referred to Ms Cannonier's preliminary statements.

"Is she not saying `I trusted Collis, Haycock and Donald Lines -- he is very forceful'?'' he asked. "They were, as you were, very powerful individuals and powerful individuals could dominate the board.'' Mr. Justice Meerabux also noted that board meetings "were very swift'' and that directors did not seem to stay around to discuss company matters for very long.

"They seemed to be very busy people with other things to do,'' he said.

Ms Gloster countered that it was irrelevant to BF&M's defence whether Donald Lines was a forceful personality on the board or that the finance committee was made up of powerful people.

"What is relevant is what organ of the company committed the company to these transactions,'' she said. "It's a fact of commercial life that the members -- including the involved directors -- were non-executive directors. The fact is that they have to do the best they can based on the information available.'' BF&M are fighting against claims of damages and seizure of assets brought against the company by Bermuda Fire's liquidator Ernst and Young, who claim the 1991 split was a fraudulent transfer of property. Ernst and Young alleges the finance committee controlled the board, and because they knew the company was about to become insolvent intended to remove assets from the reach of international creditors.

BF&M plans on calling other former directors to its defence during the trial.

Dr. Charles Dyer, Richard Spurling, David A. White, William de V. Frith and Peter Cooper are also expected to give evidence in the civil case. Mr.

Spurling, a partner at law firm Appleby Spurling & Kempe, and Mr. White, the owner of Knick Knack Co. Ltd., are current members of the BF&M board. Mr.

Frith is the current Mayor of Hamilton.

Mr. Spurling, in his preliminary witness statement, said the board had based their decision about the 1991 split and the share distribution on the figures presented by Cooper & Lines. And although Cooper & Lines original estimate of a $15 million surplus left in Bermuda Fire was soon after reduced to $12 million, the board still had a "warm feeling about the figures'' he is reported to have said, according to Ms Gloster.

Other members of the board listed in Bermuda Fire's 1990 annual report included Malcolm Gosling, John Moore, property owner and Bermuda Broadcasting Co. chairman Fernance Perry, G. McDonald Smith, then MP Dr. John Stubbs (since deceased), and Front Street retailers Eldon Trimingham and Peter Cooper. Mr.

Perry and Mr. Cooper sit on BF&M's current board.

BF&M president and chief executive Glenn Titterton, and vice president Irmgard Viera are also expected to give evidence on behalf of the company. Ms Viera was vice president of Bermuda Fire's international operations.

Former Bermuda Fire vice president John Patterson and Cyril Rance, the company's former chief executive before Mr. Titterton took over, are also expected to appear on behalf of BF&M.

Director: Jeannette Cannonier Good business: Liz Gloster Forceful: Donald Lines BUSINESS BUC