WTC Trial: Paper Trail Missing Broker Says

By Michael Ha

NU Online News Service, Feb. 26, 2:00 p.m.EST?There are no documents supporting World Trade Centerleaseholder Larry Silverstein's contention that, before terroriststoppled the Twin Towers, he secured insurance coverage for hisproperty that uphold a claim for additional billions of dollars inreimbursement, his broker conceded in court this week. [@@]

The testimony came as an attorney for one of the insurerscontesting Mr. Silverstein's claim questioned Timothy Boyd, inManhattan Federal Court.

Mr. Boyd, an assistant vice president at Willis, was responsiblefor securing World Trade Center coverage for Mr. Silverstein. Underexamination by Barry Ostrager, the lead attorney for SwissReinsurance Company, he acknowledged that there was no paperworkshowing a change in policy forms was made before the Center wasattacked on Sept. 11, 2001.

The 13 insurers contesting the Silverstein claim argue they arebound to a "Wilprop" (Willis property) form, which specificallydefines "occurrence" and would limit the claim to one event of $3.5billion, rather than a Travelers form, which offers no suchdefinition and could support Mr. Silverstein's position that thepair of jetliners which struck the towers qualifies as two eventsworth $7 billion.

Mr. Boyd, prior to Mr. Ostrager's questioning, testified thateven though the Wilprop form was sent out to the marketplace tofind carriers for the WTC program, the form governing the coveragewas later switched to Travelers' by mid-July of 2001.

However, prodded by Mr. Ostrager Monday, Mr. Boyd said hecouldn't remember ever seeing this specific information officiallywritten down to alert carriers about the change.

"Isn't it a fact, Mr. Boyd, that there is not a single piece ofpaper that states that as of any certain date [prior to Sep. 11,2001] the Wilprop policy form is not going to be the policy formfor the WTC placement" for the carriers in this trial, Mr. Ostragerasked. Mr. Boyd replied, "I don't recall seeing a written documentto that effect."

Mr. Ostrager also asked, "Do you understand that post Sept. 11,your client, the Silverstein parties, would prefer that the Wilpropform not be the applicable form governing the WTC propertyplacement?" Mr. Boyd answered, "I think that's correct."

Mr. Ostrager inquired, "So, even though you started out wantingto bind 100 percent of the insurers on the Wilprop form, that isnot the form your client wants to have now, correct?"

"That's correct," Mr. Boyd responded. The exchange took place inhis fourth day on the witness stand.

Mr. Silverstein's attorneys, while acknowledging that manyinsurers received only the Wilprop form before they issued binders,also contend that the Wilprop form was provided only as "a startingpoint" and that when Travelers had insisted on using its own form,the Travelers document had become "the operative form" for theentire consortium. Final policy documents were never signed beforethe terrorist event.

Mr. Boyd during his time on the stand appeared rattled atpoints, changing testimony, saying "I misspoke" and volunteeringextra commentaries that led trial Judge Michael Mukasey to prod himto answer more succinctly.

Mr. Boyd testified he considered Travelers to be the "the leadinsurer," with its form governing the entire WTC insurance programconsortium. In response, Mr. Ostrager brought up contrarydeposition testimony from Mr. Silverstein's risk manager, RobertStrachan?who had worked with Mr. Boyd on obtaining WTCinsurance.

Mr. Strachan in that testimony said "the whole concept of leadinsurers and follow form" was introduced by attorneys at thedeposition proceeding.

Mr. Strachan also said in deposition that Travelers "did rise tothe top and start fulfilling all the requirements" that he wouldanticipate from a would-be lead insurer, and that "if you areasking me who I thought the lead insurer was going to be on theprogram, it is obviously the Travelers." But, he said, "There wasnever a lead insurer picked prior to 9/11, this is a creation byall you guys."

In responding to Mr. Strachan's statements, Mr. Boyd told Mr.Ostrager, "I do see that. I don't agree with it."

Also testifying this week was Paul Blackmore, the Willisexecutive who oversaw the marketing of the Trade Center placementwith the London and European markets. Mr. Blackmore at the time ofthe WTC placement was a property insurance broker at Willis Londonoffice.

He testified that the Wilprop form was the only form that hadbeen sent to Swiss Re before the reinsurer signed a slip?or abinder?to offer coverage in July 9, 2001. But the Wilprop form, Mr.Blackmore said, was provided only as "a starting point."

Tuesday's trial action before testimony began saw the judgequestioning Mr. Silverstein's lawyers as to whether Mr. Strachanhad committed perjury when he was recalled to the stand foradditional testimony.

Mr. Strachan testified concerning a conversation he had on Sept.12, 2001, with Peter Lefkowitz from the Harbor Group, an insuranceconsulting firm that had advised GMAC, which lent $563 million toMr. Silverstein for his WTC lease. Mr. Strachan said that for themost part, he couldn't remember details of the conversation.

When Judge Mukasey asked Mr. Strachan if he had anyconversations with Mr. Silverstein's lawyers or had any idea why hewas asked back, Mr. Strachan said, "no."

However, at the start of the hearing Tuesday, Marc Wolinsky, oneof Mr. Silverstein's lawyers, revealed that he had actually talkedwith Mr. Strachan before his recall appearance. "I wanted to clearup something from Mr. Strachan," Mr. Wolinsky told the judge. "Idid meet with him briefly before he took the stand yesterday."

"You are telling me he perjured himself?" Judge Mukasey askedMr. Wolinsky, who quickly answered, "No, your Honor, I don't thinkhe perjured himself?I think he misunderstood your first questionand then continued from there." Mr. Wolinsky went on: "Heunderstood the question to be, ?Did any lawyer tell you how totestify today?' and the answer to that, truthfully, is no. Nolawyer told [Mr. Strachan] how to testify."

"It sounds like [Mr. Strachan] had a guilty conscience? Thiswhole business is getting curiouser and curiouser, it really is,"said Judge Mukasey.