approved in principle a draft payment scheme that would allow liquidators to wind up the company within the next 30 months.

Bermudian liquidator Mr. Charles Kempe said the scheme of arrangement, now in skeleton form, will be refined and improved before it is presented to the annual meeting of creditors in November.

A final vote on the scheme will be taken early in the New Year, Mr. Kempe said.

He reported that the team of inspection was pleased with the approach adopted by liquidators in drafting the scheme of arrangement.

The team of inspection includes representatives of Mentor's nine largest creditors: American Centennial, the Hartford Group, Continental Insurance Group, Cigna Group, Central National Insurance Company of Omaha, Aegon Insurance Group, Republic Insurance Group, Transit Casualty Company (in receivership), and Lloyd's representative Richard Outhwaite Syndicates.

Mr. Kempe said he and joint liquidator Mr. Nigel Hamilton have been working on drafting a scheme of arrangement for the past three months. The scheme allows liquidators to estimate the value of Mentor's liabilities, some of which do not reach maturity until 2020, make a final payment to creditors, and complete the winding up of the company.

Once the scheme of arrangement is approved by creditors, it must then be approved by the court, Mr. Kempe said, adding that he believes creditors will be satisfied with the scheme.

Mentor Insurance Ltd. went bust in 1985, owing more than $800 million, and becoming one of the world's largest insurance failures. There are approximately 700 creditors.

Liquidators paid out the first cash dividend of 25 cents on the dollar on March 31.