Trenwick mounts lawsuit against Swiss Re

Bermuda-based insurer Trenwick has launched a multi-million dollar suit against Swiss Re.

Trenwick said yesterday that the arbitration sought $55 million in damages and other relief Swiss Re subsidiary European Reinsurance Company. The company said its claim stems from the firm's failure to meet its obligations under a Catastrophe Equity Securities Issuance Option Agreement with Trenwick.

Trenwick CEO James F. Billett said: "The unfortunate unwillingness of Swiss Re to honour its clear cut obligations under the Catastrophe Equity Securities Issuance Option Agreement forces us to demand arbitration. "While no dispute resolution mechanism is certain, we are confident that the facts support our position and believe we will ultimately prevail."

Trial likely to last until December

A civil trial at the London Commercial Court involving Stirling Cooke Brown is expected to last until at least December, according to a report in Inside Bermuda.

The case, which began in January, follows a lawsuit filed by Sphere Drake Insurance Ltd. (now Odyssey Re) against Stirling Cooke's reinsurance and insurance brokering units, Euro International Underwriting Ltd., John Whitcombe, Christopher Henton, Nicholas Brown and Jeffrey Butler.

The defendants have been accused of operating various "abnormal reinsurance spirals", which transfers risks between a relatively small number of market players rather than spreading it out.

The court also heard that Stirling Cook held a 25 percent interest in WEB Management, a managing general agency (MGA) based in Connecticut. MGAs do loss prevention and consulting and earn commission on insurance coverage and consulting fees. "While it is not dishonest for (Stirling Cooke Brown) to have a stake in an underwriting agency, some broking houses may not have used WEB on their placements if the true ownership had been known," reported the Insurance Insider, which has been covering the trial. Nicholas Brown, Stirling Cooke's former managing director, is the next scheduled witness in the trial.

Mr. Brown developed a reputation as an "exasperating witness" in a 1999 arbitration hearing, when he avoided giving straight answers to simple questions, causing some arbitrators to question the reliability of his testimony, Inside Bermuda said.

NimsTec under investigation

NimsTec Ltd., a Bermuda-based company of which former premier Sir David Gibbons was the vice chairman, is being investigated for an allegedly fraudulent transfer of assets in the United States, Inside Bermuda has reported.

The company, which developed technology for three-dimensional cameras and produced images for a Sega Star Wars video game, has been accused by a now-bankrupt US subsidiary of defrauding it of assets worth almost $3 million.

When the US subsidiary, CPWH Company filed for bankruptcy, the company revealed NimsTec's foreclosure of assets on January 5, 2000. The foreclosure took place two months before a US District Court in Georgia found that CPWH owed former employees compensation. The document claims to cancel a 1996 sale agreement between NimsTec Ltd. and CPWH's predecessor, NimsTec North America Inc., because the US subsidiary had defaulted. NimsTec North America was supposed to make 28 quarterly payments for property worth $4.8 million.

CPWH originally acquired the property from Nishika Ltd., a bankrupt Nevada-registered limited partnership that has links to NimsTec's founder, Jerry Nims. Barbara Stalzer, the chapter 7 bankruptcy trustee of CPWH, said in a bankruptcy filing that "the foreclosure was suspect because of its timing and the relationship between the parties," InsideBermuda reported. In a letter to Bruce Walker, the lawyer for both CPWH and NimsTec - now Visual Technologies - Visual Technologies, said that "it is unclear how NimsTec Ltd. can base a `foreclosure' on a nonexistent debt."

In addition to Sir David, other Bermuda shareholders included one of Bank of Butterfield's own mutual funds, which held a $124,000 stake in the company, and subsidiaries of the Bank of Bermuda and Conyers Dill & Pearman.

NimsTec shares were listed on the Bermuda Stock Exchange for five months in 1997, until OffshoreAlert exposed misrepresentations and omissions in its share prospectus.

Transport firms file lawsuit

Two transportation companies have filed a lawsuit against Bermuda's beleaguered Stirling Cooke Brown Insurance Brokers Ltd., Inside Bermuda reported this weekend.

Ace Transportation Inc. and Dynasty Transportation Inc. are seeking $341,000 relating to an insurance contract dispute. They filed the suit June 27 at the United States District Court for the Western District of Louisiana.

The suit was one of several that has been filed against Stirling Cooke since 1999, when Odyssey Re accused the company of fraud. That case began in London in January and could continue until December or later, according to Inside Bermuda.

Dividend declared

The directors of Bermuda Container Line have declared a $0.10 dividend per share for the third quarter of 2002 payable to shareholders of record August 8, payable August 16.