creditor.

That was the shock news last night after an emergency meeting between the Central Guaranty Trust Company, of Canada, and officials from Bermuda's Ministry of Finance.

Central Guaranty will ask Bermuda Supreme Court over the next few days to appoint a receiver to take charge of the Club.

The Trust Company's vice president Mr. Larry Clinesmith said he was taking what he called "severe'' action to protect a $9 million term loan to the St.

George's Club.

The loan was due to have been repaid in full by August 9, 1992, but is still outstanding, said Mr. Clinesmith.

Mr. Clinesmith also revealed that initial talks have already been held with a potential buyer for the plush 65-unit project.

Although he would not reveal a name, he said the interested party was a "substantial'' North American hotelier.

"They are interested in taking the project on as timeshare units,'' said Mr.

Clinesmith.

Central Guaranty had no desire to become permanent owner/operator of the site and there were no plans to liquidate the project's assets, he added.

"We have always regarded this as a stand alone project and we believe it is very sound and viable,'' he said.

Until a buyer is found, the project will be kept going as it is, which includes the continuation of construction work to build more units, said Mr.

Clinesmith.

The Club's executive vice president Mr. Dan Kramer and head of timeshare sales Mr. Alan Marlow are being kept on until a new buyer is found.

Mr. Clinesmith said both men had both tried to dissuade him from appointing a receiver because of the effect it could have on business.

But he said his hand has been forced because of the chronic financial problems of the York Hannover group of property companies, which owns the St. George's Club.

"We have to take this action to protect the company from a group of European investors,'' he said.

The Swiss-based York Hannover group is collapsing all around the world, with debts of hundreds of millions of dollars.

The St. George's Club alone has a debt of $79 million, $70 million of which is internal and the rest to Central Guaranty.

The appointment of a receiver locally will not be welcomed by Bermuda resident Mr. Arthur White, who is owed 750,000 Canadian dollars by York Hannover.

Mr. White, who says his and other private investor's money was used to get the St. George's Club off the ground more than a decade ago, had been hoping to take control of the Club himself.

He has already wound up one of York Hannover's Bermuda-based investment companies and a Swiss court is expected over the next few days to declare bankrupt what is thought to be the group's holding company in Switzerland.

But Mr. Clinesmith said he was "puzzled'' by Mr. White's claim on the St.

George's Club.

"He clearly had no claim directly against the St. George's Club,'' he said.

"While I have sympathy for him, I'm rather puzzled why he has waited this long to claim against York Hannover.'' Mr. White's loan was originally due to have been repaid several years ago but he said he gave the company substantial leeway in order to prevent its collapse and subsequent damage to Bermuda's image.

Mr. White suspects that the assets of the Swiss-based York Hannover Holding AG, against which his loan was secured, have been deliberately stripped and fears he could be left with nothing.

Bermuda's Finance Secretary Dr. Walwyn Hughes said yesterday that Mr.

Clinesmith had flown to the Island at the request of Government because of concerns over the St. George's Club.

It is understood Government was on the verge of taking action itself to appoint a receiver if Mr. Clinesmith had not acted first.