Appeals Unit To Hear Trade Center Coverage Tilt

By Michael Ha

NU Online News Service, Dec. 12, 4:05 p.m. EST?A federal appeals court in New York has agreed to hear the dispute over whether the terrorists' destruction of the World Trade Center represents one or two insurable events.

The 2nd U.S. Circuit Court of Appeals said yesterday that it decided to review the matter because there was "substantial ground for difference of opinion."

At issue is whether the two hijacked planes that smashed the towers each represented a separate occurrence for purposes of the $3.55 billion "per occurrence" policy covering the Twin Towers and the retail mall at the Trade Center. The court is expected to issue a briefing schedule on the appeals and set a hearing date shortly.

Action by the appeals court is the latest development in a clash between the World Trade Center leaseholder Larry Silverstein and a group of 24 insurers led by Swiss Re, a company which is responsible for 22 percent of the coverage under the Center's multi-layer policy.

The court also granted a request by Mr. Silverstein for expedited treatment of the appeal and rejected a request by Swiss Re to dismiss an appeal regarding a previous ruling by the lower court that stated some insurers were only liable to pay on a single occurrence basis.

In that previous ruling, U.S. District Judge John Martin sided with three of the 24 insurers of the World Trade Center. He found that they had signed onto a particular "Wilprop" form that contained a unique definition of the term "occurrence" and that recovery was limited to a single "occurrence" under that definition.

The federal appeals court also agreed to decide whether the events should constitute two occurrences as a matter of law under a policy form issued by Travelers Indemnity which does not define the term "occurrence."

Howard Rubenstein, a spokesperson for Mr. Silverstein, stated: "We are extremely gratified that the appeals court agreed to hear both appeals and rejected the efforts by the insurance companies to avoid any review of the district court's rulings. We are very confident in our positions and look forward to the hearing before the Second Circuit."

Swiss Re, however, said it is confident that the lower court's ruling will stand through the appeals process.

"We are pleased that the court has allowed Swiss Re to intervene as a party opposing Silverstein's appeals. We are confident that Judge Martin's rulings will be sustained in their entirety," the company said.

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Appeals Unit To Hear Trade Center Coverage Tilt

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