Michael Milken has been ordered to pay more than $4 million to two Bermuda-based mutual funds.

US-based Drexel Burnham Lambert Inc, which is currently involved in bankruptcy proceedings, failed to contest two cases at Bermuda Supreme Court recently.

They were brought by mutuals Winchester Holdings and Winchester Futures.

Lawyer Mr. Alan Brown, who represented the mutuals, said yesterday: "This was a straightforward commercial debt.

"The action in Bermuda was to recover amounts that were withheld from them in the Drexel bankruptcy. I'm sure that the amounts will be recovered in full.'' Mr. Brown said that none of Drexel's debts to the mutuals were due to the direct activities of Mr. Milken, although it was his personal fall which acted as a catalyst for his firm's bankruptcy.

Mr. Milken is currently serving a ten-year federal prison term after pleading guilty to securities fraud charges.

Drexel rose to prominence by providing the financing for many of the biggest corporate takeovers of the 1980s, but it fell apart amid Wall Street's insider dealing scandal.