Jury Decides Against Silverstein: It Was One Incident

NEW YORK CITY-The jury has rendered its final verdict in the months-long World Trade Center insurance trial, and the one-incident scenario that held sway over last week’s decision clearly has set the pattern. Swiss Re is responsible only for a reported $877 million. In a prepared statement, leaseholder Larry Silverstein, president and CEO of Silverstein Properties, commented: “Of course, I am disappointed that the jury did not see things our way with respect to most of the insurers in the WTC coverage. But let me be clear. A defeat in the courtroom is not a defeat for rebuilding. Whatever happens in court, we are determined to rebuild the World Trade Center, under Gov. Pataki’s leadership and in keeping with the Master Plan. “Evidence of our determination to rebuild is all around,” the statement continued. “Seven World Trade Center is rising as we speak–we are up to about 20 stories of 52 total. We expect it to be ready for occupancy by the end of 2005. In the coming months, we will break ground for the Freedom Tower, the world’s tallest building, and we will complete it as scheduled in 2009.”We are ready to move on to the second phase of the trial against 10 insurers with more than a billion dollars worth of per occurrence coverage,” Silverstein stated. “We feel the evidence is strongly in our favor and look forward to our next day in court. And we’re looking forward to the day when this litigation ends so we can focus all of our attention on rebuilding.”Last week, after a verdict was rendered for the bulk of WTC insurers, Silverstein still held out hopes of walking away with as much a $5 billion, still far short of the $7 billion he had originally targeted in a two-incident scenario. The verdict came as no surprise to local industry experts watching the trial unfold. “I’d be surprised if it’s not the same outcome,” one local executive told GlobeSt.com. He said that the $7-billion claim was a long-shot at best. “But it doesn’t make a difference whether they get two attacks or one. It’s not going to be enough to hang onto his interest in the trade center.” “Even if he got the $7 billion, that alone won’t be enough to rebuild,” said William M. Shanahan, EVP and partner at CB Richard Ellis. “It’s not. And now, he’s going to have a greater reliance on third-party financing, Liberty Bonds and additional sources of capital. He had to rely on that to begin with, but now there will be more control in the capital markets than there had been before.” But the fight is clearly not done, many insiders bet. “It’s not over,” said one source. “They had to go through this process to get everyone serious about reaching a settlement, and everybody has a right to appeal. Now the insurance companies, the Port and Silverstein will all have to get at the table and figure out a deal.”But a lot of the steam has been taken out of that process since, with a verdict on their side, “the insurance companies will not be as incentivized as they would have been before.”