Monday, September 17, 2007

Silverstein in Mukasey's court

FindArticles > Real Estate Weekly > March 31, 2004 >

Silverstein has day in court as insurance battle continues
Peter Moore

Giving brief answers in a low, gravelly voice, developer, Larry Silverstein, was off the witness stand and out of the courtroom within a half-hour last Tuesday.

It was an anti-climactic way to highlight a trial, but based on an angry judge's restrictions, the best his legal team could muster.

Silverstein has narrowly escaped a civil contempt charge earlier when Judge Michael Mukasey, who is presiding over his battle with several insurers in Manhattan's U.S. District Court, ruled he had violated an order not to discuss the case publicly, but said a contempt finding could prejudice the jury. The developer held a news conference March 15 in front of the site for 7 World Trade Center, where he criticized insurers for blocking his efforts to collect double payments of $7 billion for the 9/11 terrorist disaster, which Silverstein claims was two separate attacks.

The 13 insurers--Swiss Re being the largest policy manager at 22 percent--claim they only have to pay $3.5 billion.

A controlling issue is whether a Wilprop form, which defines a terrorist attack as one occurrence, or a form issued by Travelers, which leaves the definition open-ended, was in effect at the time of the attacks.

At his news conference, Silverstein had remarked that the insurance companies were "trying to save money.

"Instead of getting insurance, we got ourselves a massive amount of litigation," he added. His remarks were printed in Newsday.

Mukasey banned Silverstein from the courtroom following the publication of his comments. The developer claimed that he had thought the judge's gag order on case participants had been lifted but, according to the judge, later made contradictory statements indicating he had known the gag order was still in effect.

Mukasey called Silverstein's explanation "not credible." Because of the controversy, Mukasey had requested a detailed script of the questions and answers of Silverstein's testimony prior to the developer taking the stand last Tuesday and had severely limited the scope of the questioning.

Silverstein acknowledged on the stand that he had little prior first-hand knowledge of the insurance coverage on the World Trade Center, prior to the Sept. 11 attacks and had left the wording of the policies to staff.

Because of the urgency to close the transaction, Silverstein had ordered his staff to secure insurance, regardless of costs.

"The Port (Authority) gave us a time schedule, pursuant to which they were seeking to close the transaction," Silverstein said in testimony, adding that those involved wanted to close in July 2001 to "avoid the August doldrums."

His risk manager, Robert Strachan, "had to do whatever he had to do to accelerate it," Silverstein added. His orders to Strachan were, "Get it done."

COPYRIGHT 2004 Hagedorn Publication
COPYRIGHT 2004 Gale Group

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