Silverstein Registers Second Litigation Triumph in One Day

January 29, 2003

Silverstein Properties Inc. reported Wednesday that the district judge presiding over its dispute with the insurers of the Twin Towers had granted its motion to compel Swiss Re and Allianz to produce notes of meetings held after Sept. 11, 2001 at which a senior executive from Travelers Indemnity told the insurers that its form controlled the coverage for the Twin Towers.

Swiss Re and Allianz had sought to shield the notes as privileged. In his ruling, Judge Martin rejected the privilege claim and ordered Swiss Re and Allianz to produce the notes. He also ordered the Swiss Re executive who took the notes to testify about the meetings.

The notes that Swiss Re and Allianz tried to reportedly withhold were taken at meetings of the insurers’ Steering Committee and at meetings attended by all of the insurers of the complex in the immediate aftermath of Sept. 11th.

Documents concerning these very same meetings that had previously been produced reportedly show that in the weeks following Sept. 11, Travelers, as the lead underwriter, repeatedly informed its fellow insurers that the Travelers policy form was to be used by the entire insurance program. The documents already produced support Silverstein’s claim that the Travelers policy, which does not define the term “occurrence,” controls the $3.546 billion “per occurrence” insurance program for the Twin Towers. Since New York law looks to the direct physical cause of the loss in determining the number of occurrences, Silverstein claims that the events of Sept. 11 – two planes hitting two separate buildings at two separate times causing two separate fires and collapses – constitutes two occurrences. This issue will be argued to the United States Court of Appeals for the Second Circuit during the week of March 24.

Even though Swiss Re was told that the Travelers form would govern the program and was provided a copy of the Travelers form before it finally bound to the $3.546 billion “per occurrence” insurance program, Swiss Re claims that its coverage is governed by the so-called “WilProp” form, a form prepared by Silverstein’s broker, Willis, that contains a unique definition of the term “occurrence.” Swiss Re also claims that under that unique definition, the events of September 11 constitute a single “occurrence” under the $3.546 billion per occurrence insurance program.

Howard Rubenstein, a spokesman for Silverstein noted, “Swiss Re has labeled Silverstein’s claim that the Travelers policy controls the insurance program for the World Trade Center as a ‘post-loss confection.’ The documents that have already been produced show that it is Swiss Re, not Silverstein, that is trying to rewrite history. We very much look forward to seeing the notes of the Swiss Re executive who attended these meetings at which the insurers were told that the Travelers form, not WilProp, governed.”

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