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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON D.C.  20549


                                    FORM 8-K


                                 CURRENT REPORT
     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


     Date of Report (Date of earliest event reported):  September 24, 1999


                         DRUMMOND FINANCIAL CORPORATION
             (Exact name of Registrant as specified in its charter)


                                    DELAWARE
                            (State of Incorporation)


            000-25677                                    95-4426690
     (Commission File Number)               (I.R.S. Employer Identification No.)


      FLOOR 21, MILLENNIUM TOWER, HANDELSKAI 94-96, A-1200, VIENNA, AUSTRIA
                    (Address of principal executive offices)


                                 (3531) 679-1688
              (Registrant's telephone number, including area code)

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ITEM  5.     OTHER  EVENTS.

In  September  1999,  Gibralt  Holdings  Ltd.  ("Gibralt")  commenced a putative
derivative  action  in  Delaware  Chancery  Court  (the "Court") naming Drummond
Financial Corporation (the "Corporation"), certain of its directors and officers
and others as defendants.  The action was filed in the form of a class action on
behalf  of  shareholders, but has not received Court certification as such.  The
action was subsequently amended to substitute certain individual plaintiffs (the
"Individual  Plaintiffs")  in  place of Gibralt and amend the action to withdraw
certain claims dismissed by the Court and clarify other claims.  The Corporation
and  other  defendants  believe the claims to be entirely without merit and have
vigorously  defended  against  the  action.

In  order to avoid, among other things, the inherent cost, time consuming nature
and  uncertainty  of  litigation,  on  July 25, 2002, the parties entered into a
Stipulation and Agreement of Compromise, Settlement and Release (the "Settlement
Agreement") in connection with the proposed settlement (the "Settlement") of the
action.  The  Settlement  Agreement  provides,  among  other  things,  that:

1.     The  Settlement  is subject to final Court approval.  If such approval is
       obtained,  the  Corporation  will  make  an  offer  to  purchase  all  of
       the  outstanding  shares  of  the Corporation's common stock not owned by
       the defendants and/or their associates and affiliates at a price of $1.25
       per  share.  The  offer  to  purchase is anticipated to be made within 10
       business days of the Settlement becoming  final.

2.     The  Settlement  will  release  any  or  all claims of the plaintiffs and
       derivative  claims  against the defendants, their affiliates, successors,
       heirs and assigns  and  any past or present officers and directors of the
       Corporation that  were  or  could have been brought in the action, and to
       the maximum extent permitted  under  law, any claims that could have been
       brought under federal or state laws, including but not  limited to claims
       that  were known or unknown, contingent,  matured,  or  not  yet  mature.
       The Settlement also releases any and all claims by the defendants against
       the  Individual  Plaintiffs that either could have  been  brought  in the
       action  or  that  in any way arise out of  the  action or the  Individual
       Plaintiffs'  conduct  of  the  action.

3.     The  action  will  be  temporarily  maintained as a class action, for the
       purposes of the Settlement  only,  consisting  of  all  holders of record
       and beneficial holders of common stock of the Corporation, other than the
       defendants  and  their  affiliates,  from  January 1, 1995 to the date of
       application to the Court  for  approval  of  the  Settlement.

4.     The  Settlement will not be an admission or concession on the part of any
       of  the  plaintiffs,  defendants  or  any shareholder or any other person
       of any liability  or  wrongdoing  by  them, or any of them, and shall not
       be offered or received  in  evidence  in  any  action  or  proceeding.


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                                   SIGNATURES


Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
Registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  hereunto  duly  authorized.



                                             DRUMMOND  FINANCIAL  CORPORATION

                                             /s/  Michael  J.  Smith
                                             --------------------------------
                                             Michael  J.  Smith
                                             President

Date:  July 25,  2002


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