Articles

Bermuda's eight major hotels yesterday reported their first collective profit since 1987. They made a combined net income of $5.8 million for the 12 months ending September 30, 1994, following total losses of $47 million for the previous six years.

More London companies are likely set up offices in Bermuda as the British insurance industry increasingly realises the long-term importance of the island's market.And more Bermuda-based insurers and reinsurers may also start having their assets managed from the island instead of having them handled overseas.These are some of the views of Bill Bailey, chairman of Bermuda's newest insurance firm, Terra Nova (Bermuda) Holdings Ltd.

Creditors of United Security Life Insurance Company Ltd will receive a first and final dividend in the region of 27 cents on the dollar sometime early in the New Year, the firm's provisional liquidator, Gil Tucker, announced yesterday.

Insurance executives aligned to two groups in Bermuda have been working frantically over the last few weeks to provide the first certificates of financial responsibility now required of shipowners whose vessels will enter US waters. Up for grabs are tens of millions of dollars in annual premiums. David Marchant looks at Bermuda's newest reinsurance product and assesses the winners and losers.

BF&M Ltd announced a ten per cent stock dividend to shareholders yesterday - only days after some of the largest volumes of trading in its shares for several months. A decision to reward long-suffering shareholders of BF&M Ltd, who have seen their capital investment drop from $10.50 per share in June, 1993, to $6.75 currently, was taken by BF&M's board of directors on December 20.

The financial restructuring of the $138 million Bermuda Financial Centre Ltd project has been delayed while efforts are made to raise debt financing abroad, we can reveal. While the Bank of Bermuda has succeeded in raising $24 million in equity commitments locally for the $58.7 million office block part of the project, it has been unable to secure the necessary loans for the scheme from within the island.

Briton Humphrey Percy has been appointed as an executive director of Bermuda-based investment advisor Strategic Asset Management Ltd.His appointment, which became effective on December 1, follows the departure at the end of the summer of Mohamed Zayan, who was one of the founding principals of SAM when it was formed last year

Stock brokers in Bermuda and overseas will be able to join the Bermuda Stock Exchange as of next week, we can reveal. Literature explaining how to join is due to be sent out over the holiday period to investment firms locally and in North America, where there has been a lot of interest from brokers.

Bermuda Telephone Company Ltd has legally challenged the control and ownership structure of Bermuda Cablevision, in which it is the largest shareholder.Telco filed a writ against the cable television supplier at Bermuda Supreme Court on Tuesday under Section 111 of the Companies Act 1981.The section allows shareholders to sue their company if they believe they are a victim of "oppressive or prejudicial conduct".

Bermuda's eight largest hotels collectively lost $46.96 million in 1988-93 at an average loss of $978,000 each per year. The losses are blamed on high salaries, rather than lower occupancy rates. David Marchant takes a look at the industry and asks how much longer hotels can afford to keep losing such large amounts of money.

Former Bermuda insurance company boss Tony Habib has pleaded guilty to masterminding an insurance fraud that swindled victims out of about $7 million.Habib, 38, who ran Bermuda-based Financial Services Insurance Ltd, is due to be sentenced by a New York court on January 25.

Since 1979, office space within Hamilton has doubled from one million square feet to two million square feet, according to a report prepared for the Bermuda Financial Centre Ltd project by accounting firm Coopers & Lybrand (Bahrain). Most of the new space, however, is not plush enough for Bermuda's international companies and "there is an acute shortage of primary, Class A space", said C&L. Businessmen and real estate agents explain how serious the problem really is.

FOR SALE - 1,375 acres of undeveloped land in uninhabited East Caicos, 50-100 yards from the ocean, asking price: in excess of $563,750.The seller is Solar Enterprises, the only local company listed on the Bermuda Stock Exchange whose shares have never traded.

A Canadian company described as "a disaster waiting to happen" has incorporated a subsidiary in Bermuda to promote the firm's interests overseas.International Hi-Tech Industries Inc, which is listed on the notorious Vancouver Stock Exchange, has a net worth of CDN$4 million.But the company's market capitalization — the value placed on it by investors in the marketplace — stands at a staggering CDN$335 million even though Hi-Tech reportedly has no sales revenue and no contracts for any sales.

The Bermuda Financial Centre Ltd, including the hotel and apartment section, would make an estimated profit of $14.5 million by 1997 rising to $20.4 million ten years later, according to projections in a report prepared by accounting firm Coopers & Lybrand (Bahrain). And return on equity was forecast to be minus 7.96 per cent for both 1995 and 1996 but improving to 20.99 percent, 33.7 per cent, 16.66 per cent and 29.58 per cent in 1997-99 and 2007, respectively. 

The multi-million dollar contract to manage the Bermuda Financial Centre Ltd project may soon be up for grabs. Winworth Ltd, which is owned by Mike Winfield, Heather Robinson and Fraser Butterworth, is on the verge of giving up the contract, we have been told.

Local businessman George Rushe has taken a $650 million mutual fund group to court in an attempt to see its list of shareholders.Mr Rushe has asked Supreme Court to order Trout Trading Fund Ltd and its management company, Trout Trading Fund Management Company Ltd, to show him their share registers.

The Department of Trade & Industry in the UK has been asked to provide details about the take-over by Centre Re (Bermuda) of London-based Anglo American Insurance following concerns by creditors that Anglo may be about to go bust.

The run off of Bermuda Fire & Marine Insurance Company may be transferred from Atropos Management Services Ltd to KWELM Management Services Ltd. 

British property developer Alistair Woolf is heading a group that is about to buy the St George's Club timeshare complex for between $3.75 million and $4.25 million, we can reveal.Mr Woolf, whose group includes several Bermudians, is currently finalising a purchase arrangement with the Club's receiver, Price Waterhouse, and is expected to put pen to paper within days.

Despite the strong criticisms of the collapse of Bermuda Fire & Marine Insurance, the company's vice-chairman, lawyer and former UBP MP William Cox, yesterday maintained his year-long public silence on the affair."I have no comment," said Mr Cox, who is the senior partner in law firm Cox & Wilkinson.Bermuda Fire's chairman, former government Senate leader Charles Collis, the senior partner in law firm Conyers, Dill & Pearman, was not available for comment.Other directors who voted to approve the controversial split-up of the company in 1991 have steadfastly refused to comment publicly on their actions since Bermuda Fire went into provisional liquidation in November, 1993.

A powerful political body in the US has launched a blistering attack on Bermuda over its handling of the collapse of Bermuda Fire & Marine Insurance.Over $40 million in assets that were dividended out to the insurer's shareholders in 1991 has been described as "a prime example of outrageous irresponsibility by an offshore insurance company".The matter was "exacerbated by a cavalier disregard for the consequences on people living elsewhere", said a report released this week entitled ‘Wishful Thinking: A World view of Insurance Solvency Regulation.'

Bermuda is heading towards a national debate over whether the country wants its stores to open on Sundays and public holidays, say traders.The battle will pit the church and people who want Sunday to remain a day of rest against businesses and Bermudians who seek the freedom to shop whenever they like.

The landlord of Hall & Associates has obtained a Supreme Court judgment that moves it one step closer towards evicting the law firm from its offices at the Emporium Building on Front Street.

The Bank of Butterfield has been caught up in a stock scandal that has hit some of Wall Street's best-known brokerage houses.One of the bank's clients - American Michael Morse - has been accused of ripping off brokers through a scam involving the technique of ‘short selling'.Butterfield was named as a defendant in a court action brought at Bermuda Supreme Court this week by giant US investment firm, Merrill Lynch.

A proposed $5 million deal to sell the plush St George's Club timeshare complex to its members has collapsed.The deal died when members failed to meet a June 20 deadline to put down a $250,000 deposit.

Key provisions of Bermuda's proposed new insurance laws.

Former Bermuda Insurance Institute director Ian Linnegan has gone into partnership with professional speaker Stuart Doyle to offer human resources and insurance-related courses to the workforces of Bermuda-based companies.Mr Linnegan has taken an ownership stake in Transitions International, which Mr Doyle has been running for the last decade.

European investigators looking into the Bank of Credit & Commerce International scandal have turned their attentions to Bermuda.They are trying to locate the assets of Sheikh Khalid bin Mahfouz, who has business interests on the island.

Financial trader Wolfgang Flottl intends to keep a trading operation in Bermuda even after he returns to New York to live, one of his US lawyers, Ted Altman, said this week.

Financial trader Wolfgang Flottl is pulling out of Bermuda over the next 18 months and moving his trading operations to New York, we can reveal.His withdrawal will have a significant impact on the local economy and will put pressure on landlords to reduce high-end residential rents.

Shares in excess liability insurer ACE Ltd. fell by $2 per share on the New York Stock Exchange yesterday in unusually heavy trading after the firm announced it was setting aside another $200 million to meet breast-implant litigation claims.

British pharmaceuticals giant Glaxo, which has taken heavy losses in the bond markets in recent months, is closing down its Bermuda investment arm with the loss of ten jobs.The decision follows a sweeping reorganization of Glaxo's board of directors announced a week ago.

The Bank of Bermuda has accepted an invitation to act as a financial advisor to the development of the Bermuda Financial Centre on the site of the former Bermudiana Hotel in Hamilton.

Reinsurer North American Fidelity & Guarantee, which is being sued for $4 million in Bermuda, moved its operations from Bermuda to Belgium in 1993 not long after failing to comply with a request to show proof of its capital, we have been told.And some insurance observers believe the company, which offered property, marine, aviation and mortgage guarantee coverage and claimed to have capital of $100 million, may have actually had very few funds available to meet claims during the year it operated in Bermuda.

The Trident Partnership LP, whose sponsors include property catastrophe reinsurer Mid Ocean, has received $660 million of capital commitments to invest in the global insurance and reinsurance industry.Although no announcement has been made on where the funds will be distributed, observers believe that some of it will come to Bermuda.

Bermuda-registered Corange Ltd, which owns German health care firm Boehringer Mannheim GmbH, said restructuring costs cut its 1993 profit to $105 million on sales of $3.217 billion, compared with a profit of $192.7 million on sales of $3.213 billion in 1992.

The private detective who suggested that Bermuda-based financial trader Wolfgang Flottl may be helping to launder drugs money has a reputation for telling "tall" stories, we have been told.Journalists, private detectives and lawyers in the United States who have had dealings with Israeli-born Juval Aviv said he should not be believed.

Ernst & Young, the provisional liquidators of Bermuda Fire & Marine Insurance Company, are to ask Bermuda Supreme Court to give them another six months to try to sort out the mess, taking them up to January, 1995.

Bermuda-based trader Wolfgang Flottl obtained a court order this week banning 220,000 copies of an Austrian magazine from newsstands on the grounds that they contained an article allegedly libelling him. Austrian police carried out a door-to-door visit of Vienna's newsagents on Wednesday evening, confiscating all copies of the down-market tabloid News.

Oil magnate John Deuss has denied there is a rift between himself and US oil giant Chevron that is delaying the construction of the Caspian Pipeline Consortium.

The joint provisional liquidators of Bermuda Fire & Marine Insurance have brought their first legal action in Bermuda since they were appointed six months ago, filing an application to be appointed receivers of Bermuda London Underwriting Agency Ltd.

Bermudian investors who have for years been staring at a collective paper loss of several million dollars from their investment in a publicly-quoted US company had something to cheer about this week.They stand to get some of their investment back - or may even end up with a profit - following the announcement on Monday of a proposed deal between NYSE-listed Regal International and a Hong Kong/Chinese conglomerate.

A Canadian businessman who claims that alleged negligence on the part of Attorney General Walter Maddocks while he was a partner in Conyers, Dill & Pearman cost him CDN$528,000 has had his damages lawsuit against CD&P dismissed because he took too long to bring it.

Bermuda Supreme Court will today deliver a judgment that has pitted father against son and is expected to be something of a test case for personal trusts in Bermuda and, possibly, internationally.The decision by Justice Vincent Meerabux will also have significant implications for the future of one of the world's leading manufacturers of pharmaceutical and health care products, Bermuda-based Corange Ltd.

Reinsurer North American Fidelity & Guarantee is being sued for almost $4 million in Bermuda, where it operated for only about a year before moving to Belgium last October.A lawsuit has been filed against the company by Bermuda-based Raydon Underwriting Management Company, which operated from the same building in Hamilton.

It's either the best buy on the Bermuda Stock Exchange - or the worst. What is it? The common stock of BF&M.

Businessman Thomas Coughlin, who is being investigated by Bermuda police following a complaint that he may have misappropriated funds from a local firm, has broken his public silence since allegations were made against him.But he has refused to shed any light on what has happened to hundreds of thousands of dollars that has allegedly gone missing from a local property development firm that he ran.Mr Coughlin, who has failed to return several calls left by us, last week gave an interview to his local newspaper in Connecticut, the Middletown Press.

Businessman Curt Engelhorn obtained an eleventh-hour court order this week to prevent Bermuda-based health care firm Corange from removing him as a director.

More US companies may turn towards Regulation S securities offerings as a way of raising money due to the recent plunge of American stock markets, according to investment manager John McNiff.Mr McNiff, who runs Bermuda-based Offshore Investment Fund Ltd (OIFL), said US firms would find it increasingly difficult to raise money through public offerings in the current climate of market uncertainty.