National Post from Toronto, Ontario, Canada • 8

8 NEWS Wednesday, May 8, 1996 The Financial Post Company News Crown Life settles Texaslawsuit Ends case that started with award Hawker Siddeley to appeal ruling on CGTX Hawker Siddeley Canada Inc. says it is appealing a court ruling that prevents it from selling its rail car leasing unit to Procor Ltd. of Oakville, Ont On April 26, after a three-day trial, a judge from Ontario Court, general division, ruled Hawker can't sell its 55 interest in CGTX Inc. to Procor. Instead, the court declared Hawker had to sell the business to Chicago-based General American Transportation a 45 stakeholder in the company, which had the right of first refusal.

General American and Procor's owner, Marmon Holding Inc. of Chicago, are arch-rivals in the rail the $40 million and the judge's latest order to pay Ferguson. However, the settlement means Ferguson's involvement with Crown Life is at an end, Bostwick said. "We felt the settlement would resolve the matter in so much as it was presumed Crown Life would appeal a judgment," Bostwick said in an interview. "We felt we could predict what would happen on appeal, and settled for what we thought we'd get at the appellate level." Bostwick would not reveal the amount.

Vanishing premiums are an option on some life insurance policies in which dividends are supposed to pay the premiums after a period of time. The system failed when interest rates dropped sharply. A number of U.S. policyholders have taken their American and Canadian insurers to court. Others are in the midst of trying to settle.

A class-action suit has also been launched against Toronto-based Sun Life Assurance Co. in what is believed to be the first vanishing premium a case against a Canadian insurer in Canada. BY SUSAN YELLIN Financial Services ReporterPit1 Financial Post Crown Life Insurance Co. has made an out-of-court settlement with a policyholder in Texas, ending a case that began as a award over controversial vanishing premiums. Don Savaria, spokesman for the Regina-based insurer, would not reveal the price tag on the agreement, saying that was a condition of the settlement.

Last fall, a Texas jury said that Crown Life should pay a total of million to policyholder Ran-, dall Ferguson and broker William Casteel as compensation for a failed vanishing-premium policy. A Texas judge recently ruled that Casteel, who had been set to receive million of the judgment, had no standing in the case and denied him the money. A few weeks ago, the figure of million for Ferguson was being considered by a judge. But the settlement agreement means the case has now been dismissed, Savaria said yesterday. And in a twist, the judge has ordered Casteel to pay Ferguson million.

Rick Bostwick, one of Ferguson's lawyers, said Casteel is expected to appeal both the loss of 1995, and this was especially the case in the latter part of the year," Brian Johnston, executive vice-president and chief financial offi- cer, told shareholders at the annual meeting yesterday in Toronto. "Slower sales in the second half of 1995 translated into weak closings in the first quarter of 1996." During the three months ended March 31, Monarch posted a profit of $3 million (8C per share) on revenues of $45.5 million, compared with $3.4 million (9C) on revenues of $41.1 million last year. Predicting better second-quarter results, Johnston said, The best month Monarch has experienced in 1996 has been the month of April." In the face of weak Canadian housing starts over the past several years, Monarch has been shifting its attention to the U.S. More than one-third of its capital is currently invested in the U.S., compared with just 10 in .1991. The company's U.S.

and Canadian revenues are almost the same, a ratio that would have been "unthinkable" five years ago, Johnston said. Monarch shares (montse) closed unchanged yesterday at $7.10. Susanne CraigFP Oshawa Group '95 net climbs 23 The top three executives of Oshawa Group Ltd. saw their bonuses more than triple in 1995, according to the company's management circular. Mister Graham, chairman and chief executive of the food distribution and retail company, was paid a bonus of $405,420 compared with $125,875 the previous year, while his salary rose 12 to $591,600.

The Toronto-based company has come off a year in which fiscal 1996 net earnings jumped nearly 23 to $65.2 million ($1.72 a share) from $53.2 million Sales for the 52-week fiscal year ended Jan. 27 were $6.16 billion, up 2 from $6.07 billion in the previous 53 weeks. Paul BrentFP car leasing business. Procor had offered $120 million for the rail operation and a one-third stake in Hawker's Beacon eye-care business. The judge did not set a final selling price, but he ruled it should allow for a $5-million breakup fee given to Procor to be subtracted, along with the value of Beacon.

Analysts calculated that would set the price around $108.5 million. Earlier, General had bid $93 million for CGTX. A lawyer for one of the parties said it may be possible to fast track an appeal. Otherwise, it may take 18 months to two years. Peter FitzpatrickFP First Marathon has investment bank hopes Toronto-based investment dealer First Marathon Inc.

has its sights on more than the market, president Lawrence Bloomberg told its annual meeting yesterday. "We're building a U.S.- or European-style investment bank" like many big U.S. brokerages that rely more on making money with their own capital and less on underwriting or trading for clients, he said. Bloomberg's comments were made in the context of an "outstanding" contribution to a $17.1 million first-quarter profit from what the firm calls investment income. The firm made a 69 pretax return last year on $25 million of capital in its pro equity account, while the five-year average is 52.

Returns from the $100 million deployed in trading strategies through offices in Toronto, New York, Frankfurt and London are lower but steady. Marathon is close to opening a 15-person office in London to trade in European markets, Bloomberg said. Dan WestellFP Monarch shifting focus totheU.Se First-quarter profits at Monarch Development Corp. fell 13.2 as a sluggish housing market caught up with the home builder. "It is no secret that the housing market was extremely weak in Yee! If true.

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What have you got to tote? Ptona call Ron Bandel at (800) 268-3504 We atoo send you a complete tat catalogue with detail on the thousands ol tots avertable. Insurers getting tough on fraud in Canada Canadian Hustncss 0. information 486 King Street West Suite 100 Toronto, ontsno M5V 1M Phone; (16) 340256 Faoc (410) 3t8-020 under oath if they make a claim. The wording warns policyholders that fraudulent claims may not be paid and that insurers are now prepared to prosecute. Other suggestions in the protocol include an inspection of all vehicles before insurance is given and conducting an analysis of the financial soundness of commercial applicants before signing them on.

Monte said his company, which writes about $24 million worth of business in Ontario every year, had been paying $1.2 million in fraudulent claims annually until he started using some of the practices, shaving just under $500,000 from that total in less than two years. Monte said special training of investigators led his insurance company to discover a farmer had claimed an additional 22 head of cattle or "paper cows" after a barn fire. In another case, a fraud ring was broken up by checking facts and doing some investigation, said Robert Cooke, president of State Farm Insurance Cos. Officials said fraud adds 10 to 15 to the cost of buying BY SUSAN YELUN Financial Services Reporter The Financial Post Quebec An increasing number of Canadians will soon find themselves questioned under oath when making an insurance claim. The move, part of an "anti-fraud protocol" released yesterday at the Canadian Insurance Congress in Quebec City, is meant to cut down on padded and false claims and other forms of fraud that cost Canadian general insurers $2 billion a year.

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SHEMILT Director, Senior Vice-President McDermid St. Lawrence Securities Ltd. OLIVER JEWELLERY MCDERMID ST LAWRENCE SECURITIES LTD 366 Eglinton West (at Avenue Rd.) Toronto 322-5996.