X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.


World Trade Center leaseholder Larry Silverstein suffered a major defeat yesterday when a federal jury found that several insurers were governed by a temporary policy that limited the payment for the destruction of the twin towers to one occurrence.

In the second week of deliberations, a jury told Southern District Judge Michael B. Mukasey that it had reached a verdict on the facts for all but one insurance company, albeit the one with the largest stake in the dispute.

Mr. Silverstein claims that the attacks were two occurrences and he should therefore be paid double the almost $3.5 billion all parties agree he is owed at a minimum.

Yesterday’s partial verdict reduced the amount that could be doubled by $1.06 billion, leaving the rest in doubt.

The outcome fell into three categories:

• Mr. Silverstein scored a victory on the facts for three insurance companies that will now have to participate in a second trial before Judge Mukasey. The issue will be the number of occurrences when the buildings were destroyed by terrorists flying hijacked planes on Sept. 11, 2001. His victory consisted of convincing jurors that the temporary policies in place left open the question of the number of occurrences.

• The so-called London insurers won outright. They will have to pay $678.9 million to Mr. Silverstein, and not double that amount. The jury found that the companies were bound by the so-called WilProp form — the policy language being used by Mr. Silverstein’s insurance brokers as they negotiated a multi-level insurance package in the months leading up to the attacks by the al Qaeda terror group.

Joining the London insurers in the winner’s circle were Federal Insurance Co, $254.3 million; Employers Insurance of Wassau, $64.9 million; Great Lakes Reinsurance, $38 million; QBE International Insurance Ltd., $12.5 million; Lexington Insurance Co., $5 million, Copenhagen Reinsurance (UK) Ltd., $4 million; and Houston Casualty Co., $2.4 million.

• The jurors were unable to reach a verdict on Swiss Re International Business Insurance. Late yesterday afternoon, Judge Mukasey urged them to return to their deliberations with renewed intensity, emphasizing that a no-verdict would only require the parties to retry the case. Swiss Re concedes that it owes Mr. Silverstein $877.5 million, an amount that Mr. Silverstein hopes to double should the undecided jury goes his way.

The three companies found by the jury as not bound by the WilProp form are Royal Indemnity Co., $127.8 million; Zurich American Insurance co., $45.7 million; and Twin City Fire Insurance Co., $2.5 million.

Those three companies will now be joined by seven others in the second trial to determine whether the attacks on the Trade Center were one or two occurrences. The seven insurers were not part of this trial because they were previously found not governed by the WilProp.

The three insurance companies that lost will attempt to convince a second jury that the attacks were one occurrence. They will join seven companies that claim they owe Mr. Silverstein a total of $956.4 million, and not double that amount.

Herbert Wachtell, of Wachtell, Lipton, Rosen & Katz, lead attorney for the Silverstein parties, declined to comment after the announcement of the partial verdict. The Silverstein parties include the Port Authority, which owns the property leased by Mr. Silverstein; Westfield Properties, which operated the commercial space at the Trade Center; and lenders involved with Mr. Silverstein.

The London insurers presented a joint defense with two other insurance companies and were represented by Boies, Schiller & Flexner and Ropes & Gray.

Kenneth W. Erickson of Ropes & Gray said after the verdict that the case, where the sides argued about contract formation, was particularly difficult because there were so many parties and so much information presented to the jury over the three-month trial.

Mr. Erickson said the challenge for his legal team, led by David Boies, was to keep the jury focused with a “thematic” presentation that made the case “as clear and straightforward as possible.”

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.