A dispute over whether as much as $525 million in insurance proceeds has been jeopardized by an agreement reordering ownership rights at the reconstructed World Trade Center site must be decided in state court, a federal judge ruled last week.

In Port Authority of New York and New Jersey v. Allianz Insurance Co., 06-5002, Southern District Judge Michael B. Mukasey rebuffed a bid by seven insurance companies to remove to federal court a state lawsuit brought by the Port Authority and developer Larry A. Silverstein seeking a ruling that the new ownership arrangement does not affect the insurers’ payment obligations.