approved by at least 75 percent of the creditors will lead to a final pay-out by the end of 1994.

A draft form scheme of arrangement has been given in-principle approval by a committee of inspection, including Mentor's nine largest creditors. The full scheme will be put to a meeting of creditors in June next year, before going to the Supreme Court in July for approval.

In its seventh annual report to creditors, joint liquidators Mr. Charles W.

Kempe and Mr. Nigel J. Hamilton said "tremendous progress'' had been made in the last fiscal year. That included: The settlement of all outstanding litigation, including suits involving Mentor's parent Ocean Drilling and Exploration Co. (ODECO), its auditors Peat Marwick Mitchell & Co., and Pinnacle Reinsurance Co. Ltd.

The distribution in March of an interim dividend of 25 cents on the dollar.

The development of a strategy that will result in a final payment to creditors within the next 30 months.

The joint liquidators have proposed a scheme which gives creditors until March 31, 1993, to file claims or amend existing claims.

The liquidators have set an October/November deadline for the scheme of arrangement to be discussed and approved by the committee of inspection, plus a December 31 deadline for the distribution of scheme documents to creditors.

Mentor collapsed in 1985, becoming Bermuda's largest-ever insurance failure, with an estimated $798 million owed to 835 creditors.

To date, liquidators have dealt "satisfactorily'' with 775 of the claims filed. Liquidators said: "These 775 claim forms represented filed amounts of $435 million; however, rejections, adjudication procedures, letters of credit, discounting and set-off reduced the net admitted value to $156.3 million''.

Liquidators said there are filed claims of $363 million remaining.

In the 12 months to June 30, 1992, Mentor's net assets, after a $39 million pay-out to creditors, increased $11.3 million to $209 million.

Net cash receipts during the financial year amounted to $120.7 million, but with investments of $58.2 million, total receipts at the end of the year were $62.5 million.

Payments during the year totalled $51.2 million, including salary and employee benefits of $1.6 million, administrative costs of $976,000, legal fees and expenses of $6.1 million, joint liquidators' remuneration of $2.3 million, actuarial fees of $153,000, other professional fees of $1.04 million, committee of inspection expenses of $57,000, plus the $39 million dividend paid to creditors.

Since the company's collapse in 1985, it has had total receipts of $312 million, including $186 million in net cash receipts. Payments have totalled $103 million, including more than $27 million in legal fees and expenses, and $14 million in joint liquidators' remuneration.