UPS

Application for the appointment of a Commissioner to collect evidence from UPS - pursuant to a request for judicial assistance from Cyprus - for a criminal investigation into Petros Zacharia and Anatoli Angelov for "conspiracy to commit a felony and illegal importation and possession of controlled drugs with the intention to supply them to others".

Application for the appointment of a Commissioner to collect evidence for a criminal investigation in Russia into AN Lyashenko, AT Stroganov, Serguei Podiouk, Pavel Smirnov, Maksim Varatsilin and Pavlo Gorbenko for alleged participation in a credit card fraud scheme.

Overseas Partners Ltd., which went run off after the termination of its lucrative shipper's risk program with affiliate United Parcel Service, paid liquidating distributions totaling $535 million or $4.50 per share during the 12 months ended December 31, 2003, the

Bermuda-based Overseas Partners Ltd. says it has reached a "tentative settlement" in two class action lawsuits filed on behalf of customers of its affiliate, United Parcel Service. The lawsuits were filed in the United States in 1999 and 2000 by parties who alleged racketeering, claiming they had been sold sham insurance in a UPS shipper's risk program that was reinsured by OPL.

Bermuda-based Overseas Partners Ltd., which is closely associated with courier firm UPS, is apparently making headway in settling its long-running dispute with the IRS in the United States."We made further progress in resolving the tax litigation with the IRS in relation to our workers' compensation reinsurance program with UPS," stated OPL in a letter to shareowners on August 20.

After unsuccessfully trying to cope with the devastating loss of its UPS Shipper's Risk program in 1999, Bermuda-based Overseas Partners Ltd. has decided to shut down its operations. In an announcement today, the firm stated it had decided to "restructure OPL and cause most of its operations to begin an orderly runoff".

The 11th Circuit U.S. Court of Appeals in the United States has denied a petition of the IRS Commissioner to rehear its earlier decision in favor of United Parcel Service Inc. in relation to the legality of its now defunct

Overseas Partners Ltd. has taken measures that it described as "painful" to preserve its capital after losing 36 per cent of it in a little over 12 months.These include suspending its share repurchase program, lowering the "fair value" of the firm's shares to $14.50 per share and reducing the dividend from 45 cents to 25 cents per share, effective August 8.

A US appeals court has overturned a 1999 decision that a reinsurance program operated by UPS and Bermuda-based Overseas Partners Ltd. amounted to tax evasion.The Eleventh Circuit Court of Appeals said the reinsurance program, which covered extra package insurance for UPS clients, was not a "sham transaction", as determined by the IRS and Tax Court.

Still suffering from the impact of losing its UPS shipper's risk account, Overseas Partners reported greatly reduced net income of $20.1 million or 16 cents per share for the quarter ended March 31 - 81 per cent less than the $105.5 million or 84 cents per share in the same quarter a year earlier.

A $14 billion lawsuit was filed this month against United Parcel Service of America Inc. on behalf of customers who have bought insurance for the past 16 years for packages shipped by the firm and reinsured through Overseas Partners Ltd.

Given the amount of money at stake, which could eventually come to more than $2 billion in back taxes and fines, the attempt by UPS to create an 'arm's length' reinsurance company in Bermuda appears to have been remarkably clumsy, according to Judge Ruwe's 114-page opinion. In laying the groundwork for the restructuring of its shipper's risk program in 1983, the company seems to have drawn up little or nothing in the way of documentation that could later be used to give the appearance that the change was driven by sound business reasons, rather than a desire to avoid US taxes.

Overseas Partners Limited expects to lose about 35 per cent of its annual premium volume as a result of the US Internal Revenue Service's recent favorable tax ruling over United Parcel Service of America, whose shipper's risk program is OPL's biggest source of revenue. The annual dollar cost to OPL is likely to be in the region of $370 million in lost premiums and approximately $200 million of net income, according to the company's own estimates.

United Parcel Service could be liable for as much as $1 billion in federal income taxes if it loses a case now before the US Tax Court in Atlanta that involves Bermuda based reinsurer, Overseas Partners Ltd., which reinsures UPS