Bermuda-based fund management and broking firm Lines Ondaatje Management (LOM) after only five months in business.

Mr. Garrett Herman, who works for Mr. Ondaatje in Canada, has also resigned as director of LOM, which is run by brothers Scott and Brian Lines, the sons of Bank of Bermuda president Mr. Donald Lines.

Mr. Brian Lines said yesterday both men were asked to resign because The Ondaatje Corporation, a Canadian merchant bank which owned 40 percent of LOM, could not fulfill its commitments to the company.

It is understood that $100 million in investment funds which Mr. Ondaatje, who heads The Ondaatje Corporation, had promised to bring to LOM never materialised.

Mr. Lines, 29, said: "Due to other ventures they were involved with, notably the setting up of an international organisation, The Ondaatje Corporation could not meet its commitments to our firm.

"After they bought into our firm they had to recapitalise a brokerage company which ended up costing them $30 million plus.

"We asked Mr. Ondaatje and Mr. Herman to resign. It was a sad departure for both parties. There are no hard feelings.'' The Lines brothers have each bought ten percent of The Ondaatje Corporation's stake in LOM, with the remaining 20 percent going to overseas investors.

The company's name is in the process of being changed to Lines Overseas Management.

Mr. Lines said LOM is "in the midst of a corporate restructuring right now'', but added: "Business is good. Everything is going ahead as planned. The only difference is that The Ondaatje Corporation and us have parted ways.'' LOM, which operates from offices in Front Street, currently has more than $40 million worth of foreign currency under administration, he added.

Mr. Ondaatje, who has a home in Bermuda, is currently in Europe and could not be reached for comment.