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A former judge who issued several key rulings in the multibillion-dollar insurance dispute over the terrorist destruction of the World Trade Center will attempt to mediate a settlement in the case. John S. Martin, who resigned from the bench this summer and is now of counsel in the litigation department at Debevoise & Plimpton, will meet with lawyers for trade center leaseholder Larry Silverstein and more than 20 insurance companies on Nov. 6 in an attempt to forge a settlement before a February trial. Attorneys for Silverstein opposed mediation before Judge Martin, who volunteered his services, pro bono, to the judge now handling the case, Southern District Chief Judge Michael B. Mukasey. Silverstein is claiming the attacks by two hijacked planes on the World Trade Center amounted to two “occurrences,” entitling him to receive double the $3.5 billion that the insurance companies claim is all he is owed under policies in effect on Sept. 11, 2001. The case is back to Mukasey on remand from the 2nd U.S. Circuit Court of Appeals, which dealt Silverstein two important setbacks in September. First, the 2nd Circuit agreed with Judge Martin’s rejection of the Silverstein argument that the attacks were two occurrences as a matter of law. The decision paved the way for a jury trial on the intent of the parties, who were still negotiating the terms of insurance agreements when the towers were leveled. Second, the circuit court upheld Martin’s ruling concerning three insurance companies that make up only a fraction of the total coverage at issue. Judge Martin had found that under the form used by Silverstein’s insurance broker, the meaning of the term “occurrence” clearly rendered the twin attacks a single event. Should several of the insurance companies persuade a jury that they too were governed by the so-called Willprop form, Silverstein’s bid to collect double insurance proceeds under the policies issued by those companies would be defeated. He would nonetheless still have a chance to press his case for double proceeds against five companies, including Travelers Indemnity Corp. Judge Mukasey’s push for mediation was opposed by Silverstein attorney Herbert Wachtell of Wachtell, Lipton, Rosen & Katz, largely because Martin had issued the rulings upheld by the 2nd Circuit. “He has not been a favorite of ours in this litigation,” Wachtell told Judge Mukasey during a conference held Wednesday to set a trial schedule and resolve other issues. Mukasey pressed Wachtell, asking whether he was “unwilling to meet with Judge Martin?” “Sometimes, somebody who rules against you might rule in your favor. Has this occurred to you?” he asked Wachtell, who responded that it had. Wachtell had a second reason for opposing mediation. He noted that Silverstein desires a settlement but the insurance companies are not “capable” of settling. An earlier attempt at mediation by Judge Lewis A. Kaplan made little progress. Wachtell said that New York Gov. Gov. George E. Pataki had already designated Kevin Rampe, general counsel of the Lower Manhattan Development Corp. (LMDC), to get the ball rolling on a settlement. Rampe in turn tapped Ira M. Millstein of Weil, Gotshal & Manges, who is working as pro bono counsel to the LMDC Board of Directors, to help resolve the dispute. EARLIER EFFORTS DISMISSED But Judge Mukasey dismissed the LMDC effort as “mediation conducted in a political atmosphere,” saying he had “a lot more faith” in talks to be conducted by his former colleague. In Judge Martin, he said, “You now have somebody who is more capable of doing something than anybody in this room.” Several lawyers for the insurance companies, including Barry R. Ostrager of Simpson Thacher & Bartlett and Harvey Kurzweil of Dewey Ballantine, did not oppose the mediation. Judge Mukasey set aside a four-week period in February for a trial on the issue of whether several insurance companies were bound by the Willprop form. Should those companies succeed, it would effectively end their participation in the case. But should they fail, those companies would join Travelers and other major insurers in a second trial to determine the parties’ intent as to the term “occurrence,” followed, if necessary, by a determination of damages.

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