WTC Insurance Dispute May Be Headed for Trial

Settlement talks are being conducted under the auspices of John S. Martin, the judge that handled the insurance rulings regarding WTC before retiring from the bench to enter private law practice.

"The February trial will be over the WilProp [Willis Property] form," Mr. McKelvey noted. If that form is found to apply, then the terrorist attacks on the Twin Towers will be deemed to have been one occurrence, he noted, limiting the insurance proceeds to $3.5 billion. The WilProp document defines occurrence as "a series of similar causes."

If the WilProp form is found not to apply, Mr. McKelvey continued, "then there would be another trial to determine the number of occurrences."

Mr. Silverstein's position is that the two planes that crashed into the towers about 20 minutes apart were two separate occurrences, entitling him to a $7 billion insurance payout, Mr. McKelvey indicated.

Jacques E. Dubois, chairman and CEO of Swiss Re America, previously indicated that he welcomed the settlement talks. A Swiss Re spokesperson said that the company will not comment on the negotiations while they are in progress.

In a separate statement, Mr. Silverstein announced that he will be recouping nearly $100 million of his investment in the WTC in a deal with the Port Authority, which owned the buildings. The money was a return of a security deposit on a loan, according to the statement.

Part of the agreement for return of the deposit is that it will be applied toward the $563 million mortgage on the property with GMAC Commercial Mortgage Corp. GMAC would in turn release escrow and reserves to be used in the rebuilding process.