NEW YORK--Several captives that ceded business to defunct Hatteras Reinsurance Ltd. are protected by trust accounts securing the reinsurer's obligations, but Hatteras may be short of covering claims of its unsecured creditors by at least $7 million and possibly much more, the company's liquidators project.

In a report filed yesterday in U.S. Bankruptcy Court in New York, liquidators said they are assuming for now that Hatteras' largest reported asset--a $152 million investment in a Delaware entity, Pamlico Enhanced Cash Trust--is valueless. The filing also asserts that a 2005 Hatteras financial statement included a purported audit opinion from Deloitte & Touche in the Cayman Islands that the accounting firm says it never issued.

Bermuda regulators moved earlier this year to liquidate Hatteras, a workers compensation reinsurer licensed in 2004, after finding that a financial statement for Pamlico also included a false Deloitte & Touche audit opinion.

The liquidators--partners of KPMG Financial Advisory Services Ltd. in Bermuda--note in the report that Hatteras' captive reinsurance clients are able to draw on trust accounts that were set up to pay their claims and that are not considered assets of the Hatteras estate.

They include captives of Philadelphia-based Aramark Corp., which has $151.8 million in trust accounts covering two workers comp programs; Electronic Data Systems Corp. of Plano, Texas, which has $2.6 million in a similar account; and a unit of Intercontinental Hotels P.L.C. of Windsor, England, which has $4.0 million in one account, according to court filings.

Hatteras liquidators are meanwhile trying to recover potential assets of the reinsurer's estate. One of these is stock worth more than $13 million that Hatteras reported receiving as initial capital from its owner, Frank P. Meadows III, a Rocky Mount, N.C., businessman. The stock is in The Nottingham Management Co., a privately held Rocky Mount company that Mr. Meadows controls, court filings say.

While unaudited Hatteras financial statements describe the Nottingham stock as Hatteras' initial capital, Mr. Meadows now maintains that the stock was never actually transferred to Hatteras and is not an asset of the estate, Mr. Meadows' lawyer, Peter Anderson, confirmed. Mr. Anderson is with Sutherland, Asbill & Brennan in Atlanta.

In a June e-mail--a copy of which was filed in court by the liquidators--Mr. Meadows wrote that Hatteras auditors had disallowed the stock as an unacceptable form of statutory capital.

Hatteras liquidators yesterday asked the New York bankruptcy court for an order blocking any sale of Nottingham shares by Mr. Meadows until ownership can be established.