The Bermuda Fire & Marine Insurance Company Limited (in liquidation) will cease to have any financial interest in BF&M next month after BF&M acquires its remaining shares and options.

The Bermuda Fire & Marine Company Ltd., which was incorporated through the Bermuda Fire and Marine Insurance Company Act in 1903 as a joint stock company with limited liability, was split into two companies in 1991 with BF&M retaining the profitable local insurance division and BFMIC retaining the debt ridden international segment.

Following the restructuring, BFMIC continued the run-off of its international business, paying agreed claims in the normal course, but over the next two years the company?s financial position deteriorated. At the time it ceased paying claims on October 15, 1993, BFMIC was said to owe more than $1 billion to its creditors.

Its liquidators sued BF&M as well as Bermuda Fire?s five former directors who sat on its finance committee ? Gregory Haycock, William Cox, Michael Collier, the late Charles Collis and Donald Lines. Their accountants Cooper & Lines and their legal advisors Conyers Dill and Pearman were also named in the suit for damages over the company?s collapse along with a large number of Bermuda Fire?s shareholders.

The liquidators claimed that the directors, accountants and legal advisors knew or suspected that Bermuda Fire was insolvent when the businesses were separated and took the cream of the business for themselves in the split.

After five months of proceedings, BF&M announced in 1999 that it had reached an out-of-court settlement with the liquidators. In 2004, this newspaper revealed that as part of that settlement, BF&M?s directors and shareholders paid out $50 million ? with $24 million of that going to legal costs for the 100 days of trial. The directors accepted no wrongdoing for the case.

As part of the settlement, the liquidators also secured options for 1.1 million shares in BF&M with a purchase deadline of December 31, 2006.

Yesterday, BF&M announced the it would purchase for cancellation 352,038 of its shares owned by BFMIC and call any and all of the 550,000 remaining options that BFMIC were entitled to exercise on May 8. The move is seven months ahead of schedule.

To acquire the shares, BF&M will pay 352,038 times 110 percent of the weighted average closing price of a BF&M share on the BSX over the period of 180 days prior to May 1 plus $147,856. The determination of the weighted average closing price shall also assume that BF&M acquired the existing options, by paying 550,000 times 115 percent of the weighted average closing price of BF&M on the Bermuda Stock Exchange over the period of 180 days immediately prior to April 28 this year, minus 550,000 times the exercise price of $11.27.

John Wight, president and chief executive officer of BF&M Limited, said the acceleration of the agreement was very positive news as it finally ended BFMIC?s ownership interest in BF&M.

?We are delighted to bring this issue to a conclusion on terms that are attractive to the company. Following our strong 2005 financial results released recently, the signing of this agreement with BFMIC is more positive news for our shareholders,? he said.