Silverstein Can't Shield WillisTalks

By E.E. Mazier

NU Online News Service, May 21, 10:40 a.m.EST?Silverstein Properties must reveal details of itsdiscussions with its broker related to the firm's claim that theWorld Trade Center destruction involved two attacks, a judge hasruled.

The decision by U.S. District Court Judge John S. Martin Jr.,sitting in Manhattan, involves talks that the Trade Centerleaseholder held with Willis Group Holdings.

Judge Martin granted a motion Wednesday by Travelers IndemnityCo. and other insurers, including Swiss Re, to compel testimony byWillis about post-Sept. 11 communications it had with Silverstein'sattorneys involving the disputed question of whether that day'sevents involved one or two attacks.

The motion was made in an action filed to clarify the extent ofthe liability of Swiss Re and several other layers of insurers inconnection with the toppling of the Twin Towers.

Judge Martin rejected Silverstein's contentions that thecommunications between Willis employees and the Wachtell, Lipton,Rosen and Katz law firm were shielded by attorney-client privilegeand the related attorney work-product privilege.

The insurers have been vigorously attacking real estatedeveloper Larry Silverstein's $7 billion insurance claim. They havemaintained that the toppling of the WTC by terrorists was oneoccurrence, which would limit recovery by Silverstein to $3.5billion.

The motion, filed in May, had asked Judge Martin to require theproduction of "highly relevant facts surrounding Silverstein'spost-loss reinvention of the WTC insurance coverage placementhistory."

Swiss Re has claimed that the Silverstein contention that thecollapse of the Twin Towers constituted two insurable occurrenceswas a "post-loss creation" by Mr. Silverstein and hisattorneys.

According to the motion papers, the Silverstein parties tried toinvoke the various privileges to keep Willis from revealing indepositions certain facts surrounding the alleged concoction of thetwo-occurrence theory.

Swiss Re said that this theory directly contradicted Willis'earlier concession that the Sept. 11 events constituted only oneinsurable occurrence as per the controlling insurancedocuments.

Jacques Dubois, chairman, chief executive officer and presidentof Swiss Re America Holding Corp., said, "We are pleased that JudgeMartin has agreed with our position that what took place afterSept. 11 between Silverstein and its broker Willis is of vitalinterest in seeing the truth come out."

Mr. Dubois said he is confident that the record "will clearlyshow that Willis believes --as does Swiss Re --that the coordinatedAl Qaeda attack on the World Trade Center resulted in one insuranceloss and that the Wilprop policy form controls in allrespects."