the company which owns the financially broke St. George's Club timeshare units.

The club's principal creditor, Canadian-based Central Guaranty Trust Company, which is owed $9 million, last night vowed to take BCB to court to get the money back.

CGTC's vice president Mr. Larry Clinesmith said yesterday: "The monies have been taken quite inappropriately. We are going ahead with legal action.'' The row involves a loan BCB made to the financially troubled York Hannover property group to prop up the St. George's Club.

It is alleged that, on September 15, the bank illegally seized $380,000 from several separate accounts held at BCB in the name of York Hannover (St.

George's).

The bank is believed to have acted because it was concerned about the security of its loan due to York Hannover's chronic problems.

Mr. Clinesmith, whose Trust Company is in the process of seizing the St.

George's Club, claims that BCB has no legal right to the money, which he said was already set aside to pay other creditors, including CGTC.

But BCB's managing director, Mr. Richard Francis, said: "Any action the bank has taken was taken after careful consideration and after legal advice.'' Any legal case is likely to centre around whether York Hannover's money at BCB was properly segregated into separate fiduciary or trust accounts, as required by Bermuda's Timeshare Act.

Mr. Clinesmith says they were properly segregated, in which case it is questionable whether the bank would have a rightful claim on it.

But BCB is understood to believe the accounts were not properly segregated.

Mr. Clinesmith said: "Some accounts were there to pay the Government of Bermuda's charges, others were for the benefit of timeshare holders and, in some cases, accounts were held for Central Guaranty's benefit.'' He added: "The St. George's Club is commencing action against the bank right now.

"Our solicitors have also sent a strongly worded letter to the bank indicating we found their actions inappropriate.

"Since the first harmed party was the St. George's Club we have to follow what action they take, due to the technicalities of the law.

"The easiest way to deal with the situation is that York Hannover will file a single action against BCB.

"Should they not be successful, we will follow up with an action for that portion of the money seized which was set aside for us. Presumably, the Government of Bermuda will do the same.'' Mr. Francis said his bank had done nothing wrong and said he was confident any legal action against BCB would fail.

He added: "Mr. Clinesmith was on the Island recently. If he had had the courtesy to honour his undertaking to call on me we could have discussed this amicably.'' CGTC is in the process of appointing a receiver to take over the St. George's Club.

This process is being held up until Government, which owns the timeshare development's land, gives assurances to CGTC that the lease will remain unchanged.

"We've had no response from Government to our request but we're not aware of any difficulties,'' said Mr. Clinesmith.