fight for control of Bermuda Cablevision Ltd.

The Privy Council in London yesterday handed down a judgment refusing to strike out a lawsuit brought on behalf of BTC against Cablevision and the US-based McDonald group.

The decision, reported late last night by international business newsletter Offshore Alert, was confirmed by David Lines, a director of the Colica Trust Company, which brought the lawsuit on behalf of BTC.

"The Privy Council upheld Colica's position,'' Mr. Lines told The Royal Gazette . "Our position is that we are trying to get this thing made right and the Privy Council agreed with us.'' According to Offshore Alert, the Privy Council said that it was "perfectly plain'' that the McDonald Group controlled Cablevision.

BTC has claimed that the Birmingham, Alabama-based McDonald Group, despite owning just 28 percent of the television company's stock, controls the business in breach of Bermuda's ownership rules which restrict foreign ownership of local companies to 40 percent.

"They controlled the board of directors through a casting vote and they controlled general meetings through the special resolution procedure,'' said the five Law Lords who ruled on the case.

They added that the McDonalds further "entrenched'' their control through the provision of a consulting agreement which gave them 60 percent of Cablevision's profits.

"In every relevant sense, the McDonald group had and have control of Cablevision,'' the judgment said. "The consequence of this holding must necessarily be that Cablevision has carried on business contrary to the provisions of section 114 of the Compnaies Act 1981, and unlawfully, since 1987.'' The judgment is a severe reversal for the McDonalds, who invested in Cablevision when the company was moribund and got it underway.

Earlier this year McDonald Group owner Bill McDonald told The Royal Gazette : "I think that right wins out in the long run and I think that will happen in the Privy Council.'' He also said that no-one had been interested in the company until it started to make money. "Once it became profitable, this other stuff started.'' The McDonald Group had claimed that BCL's structure was approved by Government in 1987 when it invested about $8 million in the company, allowing it to set up the cable system.

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