have had their assets frozen by a US court.

The action was taken last week because they cannot pay $177,000 they owe in legal bills to their former New York attorney.

Law firm O'Sullivan, Graev and Karabell was granted a preliminary injunction order by the US District Court of Massachusetts.

It prevents Dr. Beinhocker, Mr. Plunkett and their US investment firm Excalibur Ventures from touching their assets except to "pay reasonable living expenses or to conduct business in the ordinary course''.

The order includes, but is not limited to, their interests in real estate, real estate trusts, corporations, limited partnerships, rental income, bank accounts and securities.

O'Sullivan, Graev and Karabell won a judgment stating it was owed the legal bill several months ago.

But the company only decided to press harder for its money following an article in The Royal Gazette earlier this month in which Dr. Beinhocker and Mr. Plunkett's former business associates accused them of misappropriating funds.

Mr. Doug Richards, a lawyer with the firm, had previously described them both as "very fine people''.

How the new order will affect Bermuda-registered American Russian Cosmos was not clear over the weekend.

The order's wording would appear to indicate that they can continue drawing money from their assets to carry on running ARC, which aims to provide a satellite telecommunications system over the former Soviet Union.

The Americans, who hold the key posts of president, chief executive officer and treasurer, are in the process of raising capital for the project.

They recently submitted their ambitious plans to Bermuda's Communications Minister, Senator Mike Winfield.

But, in light of bad publicity surrounding the financiers, Sen. Winfield said last week: "We've gone from full-speed ahead to being in neutral.'' The Americans, however, remain optimistic.

In a statement to The Royal Gazette , they said: "American Russian Cosmos is making excellent progress.

"Its telecommunications network is coming together and proposals are being presented to potential customers.

"If the Gazette can refrain from bombarding ARC and its associates with false innuendo and outrageous scare stories, this new and speculative venture will be properly launched and hopefully be a success.

"ARC intends to downlink in Bermuda and make Bermuda an international telecommunications gateway.

"However, if ARC is not welcome in Bermuda, so be it. Our ongoing discussions are very much dependent on our perception of the atmosphere, including how many witch hunts it has to put up with by a newspaper seemingly more interested in manufacturing news than reporting it.'' Dr. Beinhocker and Mr. Plunkett have failed to come up with the name of a single business they have run successfully.

They have a long list of business failures behind them and have been defendants in an astonishingly high number of lawsuits brought by former business associates.