Trade Center Trial: RM To Be The Key Witness

By Michael Ha

NU Online News Service, Feb. 9, 4:27 p.m. EST, NewYork?The attorney for World Trade Center developer LarrySilverstein, in court against insurers' resisting the claim thatthe World Trade Center destruction involved two covered incidentsworth $7 billion, told jurors today that insurers' internal e-mailswould prove his client's case.

Earlier a rival attorney for Swiss Re opened the trial inManhattan Federal Court by telling the panel that the key witnessto make the insurers' case would be Mr. Silverstein's own riskmanager, Robert Strachan. The 13 carriers in the case contend thatpolicy language limits the claim to one event of $3.55 billion.

Final policy documents were never signed before terroristssteered two jumbo jets into the towers Sept. 11, 2001. At issue iswhether the agreement is controlled by a "Wilprop" form insurerssay supports their case or the Travelers form that would back Mr.Silverman's two occurrence argument.

The Wilprop form defined occurrence as all losses of damagesthat are attributable directly to one cause or to one series ofsimilar causes and said such losses would be added together ortreated as one occurrence. Occurrence is not defined in theTravelers form.

Herbert M. Wachtell, representing Mr. Silverman, in court todaysaid internal e-mails from Employers Insurance of Wassau in whichan employee wrote after 9/11 asking a colleague if they knew thatWilprop had no war exclusion and received a response, "Yes, thespec has no war exclusion, but I did not agree to it [the Wilpropform.]"

Mr. Wachtell cited deposition testimony from Mervyn Wood, aZurich American Insurance Company underwriter, to the effect thatZurich was not bound by Wilprop or any other form.

He also said a binder for Federal Insurance Company was issuedin July 2001, which said that no form wording had been agreedon.

Barry R. Ostrager, the attorney representing Swiss Re toldjurors that Robert Strachan, Mr. Silverstein's risk manager for adecade, who has 40 years of industry experience and is listed as aleaseholder witness, will be used to prove Swiss Re's case.

According to Mr. Ostrager, a day after the Trade Centerdestruction, Mr. Strachan had faxed the buildings' owner, the PortAuthority of New York and New Jersey, a copy of what is known asthe Wilprop form. Insurers say under that form the destruction byterrorists using two commercial airliners is defined as oneevent.

Mr. Ostrager said Mr. Strachan had written "This is it" next tolanguage on the Wilprop form, which would rule the attack oneevent. He said Mr. Strachan faxed the form to GMAC, the buildings'major lender, as well.

The attorney said in addition to Mr. Strachan, he would callNancy Townsend, of Westfield America, leaseholder for retail spacein the towers, who had discussions with Mr. Strachan concerning theuse of the Wilprop form, as well as with Marsh.

Mr. Silverstein is contending that the Wilprop form, proposed bythe consultants to limit deductibles, does not apply and that hisclaim is governed by a Travelers form. Final binding of the policyhad not occurred when the attack took place.

The case is being heard before Judge Michael B. Mukasey, who haswarned lawyers in the case they face contempt charges if they talkto the media. The judge has told jurors that their eventualdecision should not consider any possible effect on trade centerrebuilding efforts.