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LOM's response to David Marchant's Newsletter article of July 10th 2004.

16 16 2004

Hamilton, Bermuda: 16 July 2004 - According to an article appearing in the newsletter "KYC Alert" last weekend, a default judgment has been entered in the U.S. District Court in Alabama against Lines Overseas Management Ltd. "of Guernsey", along with 30 other defendants, including RBC Dominion Securities. . The LOM Group is not aware of such a judgment, and has never been served or even notified by any court or plaintiff that any such lawsuit existed.

The lawsuit appears to be an amended version of one filed in May 2001, which named dozens of entities, including several well-known brokerage firms and insurance brokers. Again, LOM was never served or contacted about that suit, and was only aware of its existence due to a news article from the publisher of "KYC Alert." Furthermore, there were no allegations of wrongdoing against or even a mention of LOM within the original complaint. LOM considered the matter frivolous and took no action. Several of the other named defendants defrauded an LOM subsidiary, Lines Overseas Management (Guernsey) Limited, in 1999. LOM obtained a default judgment against them in New York in 2000.

The Alabama default judgment is against an entity of which we have no knowledge. As a matter of prudence LOM is having our U.S. legal counsel research the matter and take whatever action is necessary.