September 15, 1999

NOTICE TO CREDITORS
First Cayman Bank Ltd. (In Liquidation)

Since our March 15, 1999 update, the Liquidators have continued to concentrate their efforts on those areas that will maximize the return to creditors of the Bank. The most significant asset of the Bank is the loan portfolio. In this regard, the Liquidators’ staff have intensified their efforts on the collection of outstanding loans. Realizations to date significantly exceed both initial estimates of value and the amount tendered for the en bloc sale of the portfolio. However, the collection effort remains a difficult one, due to the high level of delinquency, lack of security and the poor state of the files taken over. The former Bank premises located on West Bay Road also represents a significant asset of the liquidation. This property is being actively marketed by the Liquidators’ real estate agents and it is hoped that a sale will be forthcoming in the near future.

The Liquidators are in different stages of settlement negotiation or legal action with various third parties with the intention of achieving further recoveries for creditors. Because of the nature of these activities it is not possible for the Liquidators to state with any certainty when they will be concluded, or whether additional funds will ultimately be made available.

At the present time the Liquidators are pressing to resolve those matters they believe must precede a first dividend to creditors. As soon as these matters can be concluded to the satisfaction of the supervising Court, then a first dividend can be declared. The Liquidators would hope that this could be declared by the end of 1999 and paid as soon as possible thereafter. The Liquidators remain of the view that the final return to creditors will be in the range of 50 to 60 cents on the dollar, with the possibility of achieving a higher amount dependent upon the results of actions against third parties.

Yours truly,
Michael W. Pilling
Joint Official Liquidator