The Supreme Court in Bermuda yesterday ordered the scandal stricken Manhattan Investment Fund be wound up and appointed two joint liquidators to the case.

Chief Justice Austin Ward listened to counsel on behalf of the Registrar of Companies and the joint provisional liquidators at Supreme Court 1 yesterday morning before making his decision.

After reading affidavits he issued the winding up order and appointed Malcolm Butterfield of KPMG Bermuda and Anthony McMahon of KPMG England joint liquidators.

The hedge fund, which was registered in the British Virgin Islands but was administered and audited by Bermuda companies, admitted in January that it had lost $500 million after previously claiming it had made massive profits.

The scandal was unearthed after Deloitte and Touche LLP, the Bermuda auditors of the fund withdrew approval for the fund's financial statements from 1996, 1997 and 1998.

A subsequent investigation by fund administrator and local Ernst & Young affiliate Fund Administration Services (Bermuda) Inc, revealed the extent of the losses and accused the fund's managers of misrepresentation.

The Bermuda Registrar of Companies took the Manhattan Investment Fund to the Supreme Court to officially wind up the fund.

After listening to the case of the Attorney Chris Lavigne, Chief Justice Austin Ward said to the court after reading petitions: "It is hereby ordered as follows: That the Manhattan Investment Fund Ltd. be wound up by this court.'' He added: "I also give permission to seek an order for the compulsory winding up of the company in the British Virgin Islands.'' The cost of the application to the Supreme Court is to be included in the cost of the liquidation. In January and February 11 separate writs have been filed at the Supreme Court in Bermuda against the fund, its administrators, the Bank of Bermuda as the trust's bankers and Michael Berger, the man behind the scandal.

So far claims total $4.762 million in Bermuda alone.

One of these writs was issued by the registrar of companies and related to yesterday's action.

More than 250 investors bought over 2.5 million shares in the company. Among those who bought into the fund were a number of high profile multi-mangers and institutions. The liquidators at KPMG also revealed yesterday that there would be a creditors meeting in Geneva on March 27, 2000, and any creditors wishing to attend should contact KPMG in London or Hamilton.

Chief Justice Austin Ward