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potentially benefit.36

There is no indication that the outside directors of Trenwick

received bonuses.

The complaint is just as obscure when it alleges that the directors of Trenwick

America were somehow conflicted. As one would expect, the Litigation Trust is able to

allege that most of the directors of Trenwick America were employees of Trenwick and

Trenwick America. This would be natural given that Trenwick America was a wholly-

owned subsidiary. The directors of Trenwick America are alleged to have received

options in the new Bermuda holding company after the LaSalle merger. That is a wholly

innocuous fact. Moreover, these directors are alleged to have gotten bonuses. As

executives, one would expect that they might get bonuses. Nothing in the complaint

alleges that the bonuses were not determined at the Trenwick level — where the board

was overwhelmingly independent — and nothing in the complaint alleges that the

bonuses were out of order. Furthermore, the complaint makes one assertion that was

likely true, which is that the executives who served on the Trenwick America board owed

their livelihood to Trenwick. That assertion, however, would (as would the grant of

options in the new Bermuda entity) give those executives a strong interest in maintaining

Trenwick as a solvent entity capable of employing and paying them. Notably, the public

disclosures of Trenwick indicated, as I just mentioned, that the bonus pool for executives

for the years 2000 and 2001 had been trimmed in the wake of the Chartwell acquisition.

36 Hefter Decl. Ex. H at 14 (Trenwick Proxy Statement filed Apr. 17, 2000); Hefter Decl. Ex. I at 27 (Trenwick Proxy Statement filed Apr. 12, 2002).


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