The principal issue in the litigation, according to Silverstein, involves the replacement cost endorsement in the insurance policy covering the old 7 World Trade Center. Silvestein maintains IRI has claimed that under certain language in this provision, it is only obligated to pay for construction completed by the second anniversary of the September 11 attacks. IRI says that Silverstein would not be penalized if the construction is not completed in two years, but that there are incentives in place to complete the work.

The suit also seeks a declaration clarifying a number of issues that have been raised in connection with an appraisal proceeding that Silverstein has initiated against IRI to determine the total amounts that IRI must pay Silverstein under particular provisions of the policy. One provision requires IRI to pay the "actual cash value" of the building, regardless of the cost to construct a replacement building. A second provision, the replacement cost endorsement to the policy, requires IRI to pay the difference between that actual cash value of the old 7 World Trade Center and the cost to construct the new 7 World Trade Center, subject to certain limits.

Howard J. Rubenstein, a spokesman for Silverstein adds, "IRI and Silverstein have been engaged in settlement negotiations and have agreed that those negotiations should proceed not-withstanding the filing of this suit. Silverstein is hopeful that those negotiations will be successful."

The United States Court of Appeals for the Second Circuit has set July 22 as the date for oral argument on Silverstein Properties appeal from Judge John S. Martin Jr.'s ruling that a jury would have to decide whether the deliberate crashes of two planes into the Twin Towers constitute one or two "occurrences" for purposes of the $3.55 billion "per occurrence" insurance program on portions of the complex.