Accounting firm Cooper & Lines and legal advisor Conyers Dill & Pearman put together the proposals for the 1991 reorganisation of Bermuda Fire & Marine Insurance Co. Ltd. a witness for defendant BF&M Ltd. told a court yesterday.

Cooper & Lines denies the firm gave financial advice in relation to the 1991 reorganisation. Conyers Dill & Pearman argues that the firm gave proper legal advice in relation to the reorganisation.

John Patterson, who was manager of administration, company secretary and chief accountant of Bermuda Fire, yesterday began testimony in Supreme Court on behalf of BF&M.

Mr. Patterson joined Bermuda Fire in 1955 as a clerk after studying accounting at a Canadian university. He stated in court that he didn't obtain an accounting designation. He was appointed chief accountant in 1973, promoted to manager of administration and company secretary in 1985.

Mr. Patterson said as chief accountant he believed that at the time of the reorganisation there would be sufficient assets remaining in Bermuda Fire to pay a share dividend to shareholders and meet actuarial firm Tillinghast's reserving requirements.

"The board segregated the assets of the international business leaving sufficient in BFMIC (Bermuda Fire) to meet the Tillinghast reserving requirements,'' he said. "I have no recollection of any discussions about a scheme of arrangement with creditors.'' He also stated that he was not aware of any director who had concerns about personal liability arising out of the reorganisation.

"The board obtained advice on valuation from Cooper & Lines and decided on the valuation of the businesses by reviewing that expert advice,'' he said.

Prior to Mr. Patterson's testimony, Supreme Court Pusine Judge Vincent Meerabux dismissed an application by Bermuda Fire's liquidator to re-open their case by subpoenaing the former chief executive of the company as a witness.

The application was unusual as lawyers for the liquidator wrapped up their case on June 30. Since then defendant BF&M had already brought five witnesses to the stand.

The legal issue revolved around claims about whether BF&M misled the liquidator into believing they were going to call former Bermuda Fire chief executive Cyril Rance as a witness, or whether their lawyers blundered by not subpoenaing him in the first place. Mr. Justice Meerabux ruled that he could find no evidence that BF&M lawyers had misled the liquidator's lawyers they would call Mr. Rance as a witness. He also added that the liquidator's lawyers had been taken by surprise when BF&M announced Mr. Rance wouldn't be called, but only because they made an erroneous assumption.

He awarded costs of the 2 1/2 day hearing against the liquidator.

John Patterson BUSINESS BUC