Creditors of The Bermuda Fire & Marine Company Ltd., which went belly up in 1993 in a huge scandal which led to one biggest corporate collapses in the Island?s history, could have over $200 million worth of claims settled sooner than expected.

The liquidators of Bermuda Fire are to ask for a change in the scheme of arrangements in the High Court in Bermuda on April 1 and in London on March 31 which will lay the legal foundation needed to make earlier-than-expected pay-outs.

The company was said to owe approximately $1 billion to creditors at the time of its collapse, and creditors were expected to wait beyond 2015 for to be paid as much of the recovered cash as possible.

Bermuda Fire liquidators want to pay out creditors early about $222 million within the next three years. This will take the total amount paid out to creditors to $300 million.

They put the estimate of ultimate liabilities ? or the amount owed by the failed Bermuda Fire at $823 million, down from $1.2 billion registered in 1998, said the legal documents.

The new proposal puts the settlement date forward from 2015 to 2006, stating $199 million is being held as ?cash reserved for future distribution? and they have realised assets of $222 million.

?The liquidators and committee of inspection believed the proposed closure mechanism... provides the opportunity for scheme creditors to participate in the final settlement of all their respective claims against the company and will allow payment, in present value terms, of the maximum sum to the scheme of creditors in within the minimum appropriate time scale,? states the proposal.

After the legal okay is given to the proposed changes, a creditors meeting is scheduled to take place at the Fairmont Hamilton Princess on May 18 at 10 a.m. where they will be given a chance to vote on the early pay-out.

According to the documents issued by the liquidators, $84 million has been paid out to creditors of Bermuda Fire since July, 1997, and a further $199 million is cash reserved for future distribution.

Fifty million dollars was paid out by BF&M directors in December, 1999 as an out of court settlement when the liquidators sued the directors of the company. BF&M?s directors accepted no wrongdoing for the case.

According to the documents, reinsurance recoveries to date, including $51 million collected in the first quarter of 2004, total $283 and approximately 88 percent of the reinsurance programme has now been collected or commuted.

The liquidators say that the current rate of distribution of funds is 33 percent and for 2006 it would be in the range of 53 to 63 percent.

The Bermuda Fire & Marine Company Ltd. was incorporated in Bermuda through the Bermuda Fire and Marine Insurance Company Act in 1903 as a joint stock company with limited liability.

In a controversial move in 1991 its local and international business were split, creating BF&M as the local insurance division, which still operates today, and leaving the debt-ridden international segment with the original name. Its international business was primarily reinsurance written between 1969 and 1983 through both Weavers and Driver underwriting agents in the UK, and between 1978 and 1985 through Bermuda London Underwriting Agency Ltd., underwriting agent in Bermuda. Bermuda Fire & Marine Company also wrote a smaller book of international business in Bermuda from 1964 to 1990. The principal type of business underwritten was liability insurance and reinsurance, including general and product liability for manufacturers, fidelity, directors? and officers?, and in later years professional indemnity and medical malpractice.

Following restructuring in 1991, the company continued the run-off of its international business, paying agreed claims in the normal course, but over the next two years the company?s financial position deteriorated and it ceased paying claims on October 15, 1993.The run-off of Bermuda Fire is managed by KWELM Management Services Ltd., a management company that was formed in December, 1992 to administer the run-off of the KWELM Companies. Bermuda Fire participated in the underwriting pools of HS Weavers (Underwriting) Agencies Ltd and CR Driver & Co. Ltd. between the years of 1969 and 1983; and between 1978 and 1985 through Bermuda London Underwriting Agency. Bermuda Fire also wrote a smaller book of international business in Bermuda from 1964 to 1990.