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Jury selection in the trial to decide the multibillion-dollar question of whether the attacks on the World Trade Center were one or two occurrences for insurance purposes will begin on Nov. 4. Southern District of New York Judge John S. Martin late Thursday rebuffed an attempt by insurance companies that claimed massive amounts of pretrial discovery and trial preparation made it impossible to conduct the trial efficiently. But Martin also said the trial would be split into two phases, with the first dealing with issues of contract formation — the parties had only signed insurance binders and not final agreements in the weeks leading up to Sept. 11 — and the occurrence question. The second phase will concern the amount of damages. Although most of the 22 insurance companies or syndicates had asked for trial to begin next year (three companies were willing to go to trial sooner if their cases were severed from rest), World Trade Center leaseholder Larry Silverstein, the Port Authority, and the Lower Manhattan Development Corp. had all pressed for an earlier date, arguing that the future of the Trade Center depended on a quick resolution of the insurance conflict. Silverstein claims that the separate crashing of two planes into the North and South towers on Sept. 11 amounted to two occurrences, and that he is entitled to more than $7 billion in insurance proceeds. Should a jury disagree, the insurance companies would be obligated to pay only half that amount. From the outset of the case, Silverstein’s lawyer Herbert Wachtell of Wachtell, Lipton, Rosen & Katz, has insisted that time is of the essence, and the future of downtown Manhattan and the economic health of the city require an immediate answer to this question. “We definitely need to know how much money is going to be needed for rebuilding at the very earliest time,” Wachtell told Judge Martin at a hearing Tuesday. “This is not some phantom, this is the harsh reality of getting New York City rebuilt.” But Harvey Kurzweil of Dewey Ballantine, the attorney for Travelers Indemnity Co., said Tuesday there was no need to “hustle” to trial in the belief that “more money for Mr. Silverstein means more money for New York. “The only result to be determined by this trial is who pays,” he said, and he reiterated that argument Thursday to no avail. Judge Martin, who has been hashing out discovery disputes with the lawyers, has become increasingly skeptical of the need to rush forward and try the case, largely because the planning and design process for the site is proceeding slower than expected. At this point, submissions for a design competition for a memorial at the site are not due until June 2003. And the first wave of submissions for an overall rebuilding plan that would include a memorial and millions of square feet of retail and commercial space have been criticized by officials and the public as inadequate and uninspiring. But in the end, Martin set aside his concerns over the uncertainty of the plans for the site and focused on what he said was “one of Parkinson’s Laws — that the work will expand to the time allotted it.” The Port Authority, which gave a 99-year lease to Silverstein last year — so close to the attacks that some contract issues were still being negotiated when the planes hit the buildings — also wants a quick answer from the court. “You can’t plan a building without knowing how much money you have to build in the first place,” Port Authority lawyer Timothy Reynolds of Skadden, Arps, Slate, Meagher & Flom said Tuesday. Thursday, Reynolds said the Port Authority and Silverstein “are facing a hole in the ground and the insurance companies are sitting on that money earning interest.” At a minimum, Reynolds argued, Silverstein should receive, as quickly as the amount can be determined, the actual cash value of property, even before the occurrence issue and the replacement cost of the property can be determined. “That money is clearly due to us now,” he said. BIFURCATED TRIAL During brief arguments Thursday, Wachtell said the insurance companies “had their tongues hanging out” for a bifurcated trial “because they were better off tactically not having a single jury deciding contract issues and valuation.” As the parties are now faced with racing to complete more than 130 depositions in advance of trial, Martin is scheduled to hear summary judgment motions, and also arguments on whether the binders signed by the parties constituted, in essence, a final agreement, or whether there were critical issues remaining to be negotiated when the attacks occurred.

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