customers drowned has been prevented from transferring the assets of his business to a limited liability company.

Two days before a lawsuit was brought against him alleging negligence, Mr.

Michael Heslop applied to incorporate a limited liability company to acquire the assets and liabilities of his business, Fantasea Diving.

But Mr. Justin Williams, lawyer for Briton Mr. Peter Frymann, whose wife, Eileen, died in a diving accident off Bermuda last year, has obtained an injunction to prevent the arrangement.

At the time of the accident, Mr. Heslop operated his business as a proprietorship.

Under this arrangement, the owner or owners of a business are liable without limit for any debts it incurs.

Yesterday, lawyer Mr. Timothy Counsell, who is a joint sponsor of the proposed new company, along with Mr. Heslop and Mr. Heslop's friend, Mr. Luciano Aicardi, said: "I can say categorically there was no improper motive behind the application. There were business reasons for doing it.'' Following the instigation of Mr. Frymann's lawsuit against Mr. Heslop, he added: "Everything's on hold at the moment pending the recent developments.'' Mr.

Williams confirmed that an injunction had been issued but declined to go into details.

He said: "Negotiations to resolve the dispute are being carried out. Under the circumstances, I do not think it appropriate to comment further at this time.'' It is understood that insurance company BF&M will not pay out an insurance claim related to the accident because a warranty on Mr. Heslop's policy was not complied with.

Mrs. Eileen Frymann drowned near The Constellation shipwreck, at the west end of the Island, last April during a diving trip with her husband and her daughter, Abigail. None had dived before.

At an inquest into her death earlier this year, Mr. Frymann alleged that Fantasea Diving had not given the family any emergency training before allowing them into the water.

He claimed the family had not been taught how to jettison a weight belt, inflate a life belt or how to surface safely.

It was also disclosed that Mr. Heslop's commercial boat licence had expired when the accident happened.

Mr. Heslop could not be reached for comment yesterday. An employee at his firm said he was out on a dive.

Mr. Michael Heslop.