Frequently Asked Questions

SAFE HARBOR FUND, L.P. RECEIVERSHIP

1. Why was a Receiver appointed for Safe Harbor and what is he supposed to do?

The Court has appointed me to take control of and protect the assets of Safe Harbor and to manage its business. If it's necessary to bring or defend lawsuits, I'll also do that. I'll also be establishing a claims procedure under the supervision of the United States District Court for the Southern District of New York, which will determine the identity of the Safe Harbor investors and the amount of their investments. The Court will then approve a plan for distribution of Safe Harbor's assets to the investors.

2. What about the Cayman Islands liquidation?

On February 3, 2004, the Grand Court of the Cayman Islands entered an order placing Master Fund in liquidation and appointing Theo Bullmore and me as Joint Official Liquidators of the Master Fund. That same day, Mr. Bullmore was also appointed the sole Liquidator of Bristol Fund, Ltd. Mr. Bullmore is an accountant and the managing partner at the office of the accounting firm of KPMG in the Cayman Islands and can be reached at (345) 949-4800. Since our appointment, Mr. Bullmore and I have begun requesting Master Fund information and documents from third parties; marshalling the Master Fund's assets; reviewing strategies that would hasten a distribution of Master Fund's assets to investors; investigating potential litigation against third parties; communicating with investors in the Feeder Funds; and addressing tax issues.

3. We hear there's a lot of money in the bank. Why can't there be a distribution now?

Safe Harbor currently has minimal assets and, therefore, nothing to distribute until it receives a distribution from Beacon Hill Master, Ltd. (the "Master Fund"). The Master Fund is currently in liquidation in the Cayman Islands with Theo Bullmore of KPMG Cayman Islands and myself acting as Joint Official Liquidators. Once the Master Fund makes a distribution to Safe Harbor, I'll need to complete the claims process to identify investors and the amount of their claims, and the Court will need to determine the manner in which monies available for distribution are to be divided among the investors.

There is also considerable controversy regarding the basis upon which each investor will participate in any distribution. There are three, and perhaps more, methods upon which investors could receive payment. First, distributions could be made based upon the limited partnership share of each investor as shown in the books and records of the Feeder Funds. Second, distributions could be made based upon the actual net cash or principal loss each investor incurred. This method would only require verification of the amount of cash invested and the amount of redemptions received. Third, distributions could be made based upon the revaluation of NAVs by Gifford Fong & Associates and PricewaterhouseCoopers ("PWC") for each subscription and redemption.

Even more importantly, ATC Fund Services (Cayman), Ltd., the former fund administrator ("ATC"), and Beacon Hill Asset Management, LLC, the former investment manager for the Master Fund ("BHAM"), have been sued by 34 investors. ATC and BHAM are claiming indemnification from the Master Fund, pursuant to an Administration Agreement and Investment Management Agreement, of up to $1 billion for potential liability under these and other potential lawsuit. Although one of these investor actions, involving 32 investors, has been dismissed by the Court, the plaintiffs have until June 30, 2004 to re-file. These indemnification issues must be resolved before the Master Fund can safely distribute its assets to the Feeder Funds and before I can then distribute money to the investors.

4. How is the Receiver planning to address the indemnifications?

It is the position of the Master Fund and Safe Harbor that the indemnification claims of BHAM and ATC are invalid and improper. Currently, Mr. Bullmore and I are investigating the best way to dispense with any indemnification claims made by ATC and BHAM so that this potential roadblock to an investor distribution is resolved.

5. When am I going to get my 2002 K-1?

Despite understandable concerns of investors concerning their K-1 partnership tax information for the year 2002, I am unable to issue 2002 K-1s at this time, because Safe Harbor has itself not yet received its 2002 K-1 from the Master Fund. As a result of the fact that the Master Fund has not issued a K-1 to Safe Harbor, Safe Harbor has not filed its own 2002 partnership tax return. In addition to the lack of information upon which to file a tax return, I am unable to file a return for Safe Harbor under the I.R.C. as I am not a "partner" of the Safe Harbor partnership. Possible options are being explored to remedy this situation, including working with the United States Internal Revenue Service.

6. How can I make my views known to the Receiver?

In March 2004 Mr. Bullmore and I, as Joint Official Liquidators of the Master Fund, sent forms to each investor in the Feeder Funds requesting nominations of investors willing to sit on a Cayman Islands Liquidation Committee. After nominations are made, the investors at large will be asked to vote on which eight to ten nominees they wish to sit on the liquidation committee. The function of the Liquidation Committee will be to convene periodically, consult regarding various liquidation issues, and convey their views to the Joint Official Liquidators. While the Joint Official Liquidators will place great weight on the views of the Liquidation Committee, their function is merely consultative and the Joint Official Liquidators will balance their views with the views of the investors as a whole. If you do not sit on the Liquidation Committee, you can make your views known to the Joint Official Liquidators and me by sending written correspondence to the my office. All correspondences will be reviewed, and, where necessary, responded to.

7. Will my identity as an investor in Safe Harbor remain confidential?

I will take all possible precautions to protect the identities of the Safe Harbor investors from third parties and members of the media. However, I will comply with any request to disclose the names of investors to the Securities and Exchange Commission, the United States Attorney's Office, and other governmental agencies. Additionally, there may be instances in which I am required to reveal the names of Safe Harbor investors including in responding to a subpoena or when filing a final investor list with the United States District Court for the purpose of distribution.

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