Trade Center Trial: RM To Be The Key Witness

By Michael Ha

NU Online News Service, Feb. 9, 4:27 p.m. EST, New York?The attorney for World Trade Center developer Larry Silverstein, in court against insurers' resisting the claim that the World Trade Center destruction involved two covered incidents worth $7 billion, told jurors today that insurers' internal e-mails would prove his client's case.

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

Final policy documents were never signed before terrorists steered two jumbo jets into the towers Sept. 11, 2001. At issue is whether the agreement is controlled by a "Wilprop" form insurers say 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 damages that are attributable directly to one cause or to one series of similar causes and said such losses would be added together or treated as one occurrence. Occurrence is not defined in the Travelers form.

Herbert M. Wachtell, representing Mr. Silverman, in court today said internal e-mails from Employers Insurance of Wassau in which an employee wrote after 9/11 asking a colleague if they knew that Wilprop had no war exclusion and received a response, "Yes, the spec has no war exclusion, but I did not agree to it [the Wilprop form.]"

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

He also said a binder for Federal Insurance Company was issued in July 2001, which said that no form wording had been agreed on.

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

According to Mr. Ostrager, a day after the Trade Center destruction, Mr. Strachan had faxed the buildings' owner, the Port Authority of New York and New Jersey, a copy of what is known as the Wilprop form. Insurers say under that form the destruction by terrorists using two commercial airliners is defined as one event.

Mr. Ostrager said Mr. Strachan had written "This is it" next to language on the Wilprop form, which would rule the attack one event. 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 call Nancy Townsend, of Westfield America, leaseholder for retail space in the towers, who had discussions with Mr. Strachan concerning the use of the Wilprop form, as well as with Marsh.

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

The case is being heard before Judge Michael B. Mukasey, who has warned lawyers in the case they face contempt charges if they talk to the media. The judge has told jurors that their eventual decision should not consider any possible effect on trade center rebuilding efforts.

Special Reports /

Trade Center Trial: RM To Be The Key Witness

Related Stories

Recommended For You