recover $1 million funds in a portfolio it allegedly had under its management and lost.

The Bermuda-based investment firm LOM is being sued by one of its investors, Overseas Finance Management, which has filed an action against the company in the Supreme Court in Bermuda for $1 million.

In a writ issued on January 27, 2000, Overseas Finance Management claimed that LOM lost a substantial amount of $1 million it had handed over for investment through negligence.

According to court documents, the portfolio now contains just $102,000.

In a written judgment on a preliminary matter Assistant Justice Philip Storr said: "By its writ of summons issued on the 27th January the plaintiff (Overseas Finance Management) claims damages from the defendant (LOM) arising from the deposit for investment of approximately $1,000,000 by the plaintiff with the defendant, which carried on business as an investment manager for clients having funds to invest.

"The plaintiff alleges that in breach of the terms of either an express agreement or an implied agreement the defendant invested the plaintiffs fund in such a manner as to cause the loss of a substantial part of those funds. It pleads its case, in the alternative, in negligence alleging that the defendant failed to exercise the proper standard of expertise in managing those investments with the same result.'' The details were revealed in a written judgment issued after LOM asked for security to be put up by Overseas Finance Management for legal costs.

Legal costs for LOM had already at the time of filing reached $50,000 and were estimated to rise to $197,000, and LOM wanted to get $150,000 of that figure secured in court.

The judge said that Overseas Finance Management should give security for costs of $100,000. He added: "It (the company) may do so by instructing the defendants to transfer monies held in its account into court.'' And he stayed all other actions in the proceedings until this had been completed.

No address is given for Overseas Finance Management, but it is not a Bermuda company. Ian Medad is named as the controlling director and shareholder of Overseas Finance Management.

He said in a sworn statement that the only funds Overseas Finance Management had was the $1 million held by LOM, so the only remaining funds were what was left in the portfolio.

Mr. Medad in his affidavit said it was the defendant's own actions which have brought about the `impecuniosity' -- i.e. having little or no money -- of his company and urged that this be taken into consideration when the judge made his decision.

The judge said that the case was clearly triable on the evidence he had seen.

He added: "I cannot say at this stage, whether the plaintiff or the defendant has a better chance of success, but both parties ought to have the opportunity of being heard.''