Former Bermuda Fire director William Cox has guardedly admitted awareness that "something might go wrong'' in 1991 -- the year his company made its controversial restructuring.

Liquidators Ernst & Young have charged that the split, which segregated Bermuda Fire's ailing international books from the profitable domestic operations, was illegal.

Top on their list of allegations is that company directors such as Mr. Cox approved the division at the same time they suspected Bermuda Fire was insolvent.

Mr. Cox told liquidators representative Clare Montgomery QC that his verdict at an 11 April, 1991 meeting was "great idea, but this is a fraudulent conveyance'' when US advisers J.P. Morgan recommended moving the domestic business out of Bermuda Fire.

However, Mr. Cox said, "I was advised not only that what we were doing was beyond danger, but we had an adequate measure of safety beyond what was required.'' "You had to take responsibility for yourself,'' Ms Montgomery said.

"I don't agree with that statement,'' Mr. Cox answered.

"It was not up to me to second-guess these people, our advisers. I had to rely on them, and I had no grounds to think that there was any doubt in what they were telling us.'' In his testimony this week Mr. Cox has frequently invoked Bermuda Fire's advisers, in particular local accountants Cooper & Lines who worked with London actuaries Tillinghast, as carrying the onus: "Our lawyers made it perfectly clear what was necessary,'' he told Puisne Judge Vincent Meerabux.

"This was made very clear to our auditors and actuaries. They knew what was required.'' Ms Montgomery suggested that in his "heart of hearts'' Mr. Cox has unspoken doubts that Bermuda Fire was in danger from, among other concerns, steeper than expected liabilities arising from its overseas books. She asked him: "You knew, and you were concerned, that it was reasonably possible that the business of the international operation would continue to deteriorate, didn't you?'' "You mean was it likely?'' Mr. Cox said.

"I thought it would not happen.'' Ultimately, he said, "I decided my concerns were ill-founded, and it was proper for me to go along with what was being planned.'' The case continues.

BUSINESS BUC