Former Bermuda Fire director Gregory Haycock stated yesterday in Supreme Court that at the time of its 1991 reorganisation, the company was armed with more than sufficient assets, and he had seen no need for a worst case figure in the event of "a possible understatement of reserves'' on the part of its advisors.

Afternoon sessions began with Cooper & Lines representative Ian Croxford QC wrapping up his questioning of Mr. Haycock on his witness statement. Of particular note was a paragraph wherein Mr. Haycock said Bermuda Fire management looked to its financial advisors in determining whether sufficient assets were left behind in the old company at the time of its 1991 reorganisation.

"It would be incorrect to say that in determining the assets left behind in Bermuda Fire, you looked simply to Cooper & Lines,'' Mr. Croxford said. Mr.

Haycock replied that he thought the decision was "predominantly based on the figures produced by Cooper & Lines'', but agreed that other factors would have been taken into account.

Richard Millett QC, who represents 827 BF&M shareholders, then asked Mr.

Haycock: "Do you remember what financial benefits you received in and after September, 1991, from your directorship of BF&M?''. Mr. Haycock answered: "There were no significant financial benefits that I can recall.'' The bulk of the afternoon was taken by Clare Montgomery QC, who represents liquidators Ernst & Young. Ms Montgomery questioned Mr. Haycock very closely on his understanding of a director's responsibilities versus those of an auditor. "By 1990, you would have understood that the process of casualty actuaries estimating liabilities was inexact,'' suggested Ms Montgomery. When Mr. Haycock agreed, she continued: "You understood that there would be a wide range in relation to the reserve estimates they would have made.'' "I don't think we were ever involved in those discussions,'' Mr. Haycock said, adding that his communications tended to be simply with management.

A laboured wrangling over the issue of "range'' figures, not atypical in this case, then ensued. Eventually Mr. Haycock conceded that an estimated risk figure from underwriters Tillinghast of London was based on a best estimate that "could be understated, or overstated''.

He reiterated his opinion that at the time of its 1991 split, Bermuda Fire was a healthy company and he had been comfortable with the financial figures on hand.

"How much might have been involved in a possible understatement of reserves?'' Ms Montgomery asked. Mr. Haycock said no such figure had been calculated. "But wasn't that a rather important figure to identify?'' she continued. Mr. Haycock said: "It was more important, in my own mind, to be satisfied that $15 million (a rough figure of Bermuda Fire's assets) was more than sufficient to cover it.'' The case will continue on Monday.