Since his appointment in August 2009, the provisional liquidator of the failed British American Insurance Co. has realised assets worth approximately $15 million.Close to $3.9 million of that money was spent on professional fees to agents KPMG Advisory and Conyers Dill & Pearman, according to a report by the Official Receiver/Provisional Liquidator (PL). The report was published online at www.kpmg.bm/ba as final payouts to the policyholders were made.The report noted the amount of $7.8 million was specifically pledged for Bermuda resident creditors as a result of actions taken before British American’s insolvency by Bermuda regulatory authorities.The report showed a first interim distribution of some $7.152 million was paid and funds available for final distribution were some $538,249.40.A reserve for unclaimed first distribution payments remains of some $383,000.Other expenses listed that came out of the realised assets included some $461,000 paid as a settlement to the Judicial Manager of British American in the Bahamas, redundancy and preferential claim payments of $246,000, and operating expenses of $2.2 million.The report showed a total of $3.49 million has been paid out so far to KPMG Advisory and Conyers, and unpaid professional fees as of August totalled $438,291.Discussing the fees in the report, the Official Receiver/Provisional Liquidator (PL) said the winding up of BAICL Bermuda had been “a complex, multi-jurisdictional exercise”.He further noted that both firms had agreed to discount their professional fees.The report stated: “The time intensive job of managing the BAICL Bermuda operations and the administrative burden of managing more than 6,000 policies, over a period of approximately four years, has resulted in significant professional costs to the estate.“The PL has where possible sought to minimise the professional fees and operating costs charged to the BAICL Bermuda estate by negotiating discounts to the agents usual hourly rates, utilising the services of certain former BAICL Bermuda employees, and by continually seeking to reduce the general operating costs of BAICL Bermuda.”The reported pointed out: “KPMG Advisory agreed to discount their fees by approximately 40 percent, and similarly, Conyers agreed to discount their fees and not to charge all their time spent on the engagement. To date discounted fees paid to the agents out of the BAICL Bermuda estate total $3.49 million.”By way of background, the report said British American Insurance Company Limited, a wholly owned subsidiary of CL Financial was incorporated in the Bahamas, and provided life, health and property insurance policies, primarily in the Caribbean and Bermuda. BAICL operated in Bermuda as a branch.“On July 29, 2009, as a result of increasing financial difficulties facing BAICL and its parent company, the Bermuda Monetary Authority filed a petition with the Supreme Court of Bermuda to wind up BAICL,” the report stated.“This action was necessary to safeguard available assets for the benefit of BAICL Bermuda creditors. On August 3, 2009, the Official Receiver was appointed as provisional liquidator of BAICL by Order of the Supreme Court of Bermuda. Following his appointment the PL appointed KPMG Advisory Limited and Conyers Dill & Pearman Limited to act as his agents in this matter.At the time BAICL Bermuda was placed in provisional liquidation it had approximately 7,200 policies in force, providing health and life insurance to approximately 5,500 Bermuda resident policyholders.An agreement was made with Argus Group to provide health insurance to BAICL Bermuda individual and group health policyholders on the same terms and conditions that were provided by BAICL.The liquidator said he and his agents spent a considerable amount of time investigating options that would allow for the continuation of the life insurance policies. But no solution was found.As a matter of law there was some question as to who was entitled to certain assets: Bermuda resident creditors or all creditors of BAICL, the report noted.“In order to prevent costly and time consuming litigation to determine entitlement to the Other Assets, the PL negotiated a settlement with the Judicial Manager of BAICL (appointed by the Commonwealth Court of the Bahamas) on December 22, 2010. The Settlement Agreement, which was approved by the Supreme Court of Bermuda and the Commonwealth Court of the Bahamas, provided that in exchange for the payment of 445k, the JM agreed to waive any further rights or claims to both the Pledged Assets and the Other Assets.Recoveries from Other Assets totalled approximately $7.2 million, and have been used by the PL to meet the ongoing operating costs and professional fees relating to BAICL Bermuda, and payment of the second distribution to Bermuda resident creditors.“In December 2011, after realising substantially all of the assets available to Scheme Creditors, the PL declared and paid a first distribution to Scheme Creditors.“The first distribution totalled $7.535 million, representing 35 percent of Scheme Creditors’ claims.A second distribution was dependant on the realisation of BAICL’s 40 percent interest in Bram-ber. The Building was valued in 2009 at approximately $3.8 million; however, given the prevailing conditions of the Bermudian property market, offers received for the Building were significantly lower than the 2009 valuation. Following an extensive sales process and negotiations with potential purchasers, an offer was received and accepted in January 2013.“This offer resulted in Bram-ber, receiving net proceeds of $1.628 million for the Building.BAICL Bermuda’s share of the net proceeds from the Building sale totalled approximately $650,000 which was received from the liquidator of Bram-beer in August 2013.”The remaining 60 percent interest in Bram-ber was owned by the Bermuda Employees of British American Pension Trust.