his former business partner's role in his downfall is clarified, a Supreme Court judge ruled yesterday.

Mr. Robert Thomson, Mr. Peniston's former partner in the glass-bottom boat business Bermuda Vacations, has petitioned the Supreme Court to force Mr.

Peniston into bankruptcy.

But in an affidavit filed to fend off bankruptcy, Mr. Peniston alleged Mr.

Thomson engaged in "wilful mismanagement'' to destroy Bermuda Vacations, which was wound up last year after a separate court action launched by Mr.

Thomson.

Mr. Peniston alleged Mr. Thomson wanted to force him out of the business and eliminate him as a competitor.

Yesterday, Puisne Judge the Hon. Mr. Justice Ground said he had not heard enough evidence to determine whether or not Mr. Thomson engaged in unlawful or oppressive conduct against Mr. Peniston.

The fact that Mr. Thomson got involved in a competing business and bought Bermuda Vacations' glass-bottom boat The Reef Goddess when it was sold at public auction did not in itself constitute such conduct, the Puisne judge said.

If Mr. Peniston's complete allegations were true, the court would have grounds to deny the bankruptcy petition, Mr. Justice Ground said. But, "it is not enough for the debtor simply to allege it.'' Mr. Peniston's affidavit raised enough questions to justify a trial, although his allegations were "thinly particularised, particularly on wilful mismanagement,'' the judge said.

If Mr. Thomson wants to proceed with the bankruptcy action, he must file a response to Mr. Peniston's affidavit, and the issue will be tried, Mr. Justice Ground said in ordering an adjournment. The same hearing will be used to determine whether or not Mr. Peniston has the ability to pay off all his creditors, and avoid bankruptcy in that way.

On Friday, Mr. Peniston's lawyer Mr. Delroy Duncan filed another affidavit which purported to show his client's solvency.

But Mr. Andrew Martin, lawyer for Mr. Thomson, said he would want to cross-examine Mr. Peniston on the new affidavit. "Even on its face, the residual equity that is indicated would not appear to discharge all of the debts which are enumerated,'' Mr. Martin said.

"I'm also instructed that the residual equity of (Mr. Peniston's) property is to be divided between Mr. Peniston and his former wife.'' Outside court, Mr. Martin said he had not yet taken instructions from Mr.

Thomson, but he expected the businessman would file a response to Mr.

Peniston's affidavits fairly soon.

Mr. Duncan said Mr. Peniston was "happy that the court took the view that there was a triable issue.''