The Bermuda Commodities Exchange (BCOE) have appointed a liquidator to oversee the winding up of the exchange after saying that its "liabilities" have forced it to close.

In Government Notices published yesterday, the board of directors of the BCOE said that following a special general meeting on Monday, it was decided that Jocelyn Troake be appointed liquidator and that creditors submit any claims to Ms Troake by December 7.

The directors claimed it had been proven to its satisfaction that BCOE "cannot by reason of its liabilities continue its business".

A final meeting of creditors will take place on December 21, to show the manner in which the company was wound up, the property of the company disposed, and any other business relating to the winding up.

Based on Richmond Road in the American International Group building, the exchange opened its doors for trading on November 12, 1997, recorded its first trades that same month, and had attracted 20 of Bermuda's leading insurers, reinsurers and financial service companies as its members.

Shortly after the BCOE started trading, then president of the exchange Thomas Heise said that while $500 million in trading was the break-even mark for the fledgling exchange, he hoped the volume would eventually rise to "tens of billions of dollars."

The exchange created an electronic marketplace and a new set of options contracts for hedging and investing in catastrophic insurance risk.

The (BCOE) suspended trading in August 1999 less than two years after opening due to harsh trading conditions.

The insurance market had been suffering from an excess of supply over demand, especially in the property/casualty business, which had driven down rates to the point where the purpose of the exchange could be more efficiently achieved by going direct to the insurers.

In a statement to members of the BCOE on August 12 1999, the board of the exchange stated: "The board...determined that in light of the current market conditions, it was in the interests of the members to suspend trading...until such time as the board determines that the BCOE should once again commence trading."

The statement added: "The Board...has reached agreement in principle with the American International Group, the main creditor, to cover the exchange's ongoing costs during the suspension period. The BCOE has no open trading positions against its 1999 contracts. It is expected that the limited number of positions with respect to 1998 contracts will expire without value as the risk period is now over, without a significant event occurring."

Current director of the BCOE, Joseph Johnson did not return calls made by The Royal Gazette.