Appraisal Becomes an Option in Swiss Re/Silverstein WTC Dispute

March 20, 2003

Federal District Court Judge John Martin has ruled that Silverstein Properties, the master leaseholder of the World Trade Center, must submit the dispute over the valuation of the buildings lost as a result of the Sept. 11 attacks to an appraisal process.

Swiss Re was not a party to the demand which was made as a motion to be allowed to join Allianz in starting the appraisal process by Travelers, General Electric’s global insurance unit and some 20 underwriters at Lloyd’s, including syndicates controlled by ACE, Amlin and Hiscox. It opens the possibility that appraisers appointed by each side will try to determine the insured value of the twin towers and the amount of Silverstein’s recovery.

Swiss Re, the lead insurer of the WTC complex, has indicated that it is looking to a jury trial to decide the issue of whether the events of Sept. 11 constituted one “occurrence,” as it contends, or two events, as Silverstein maintains.

Martin rejected Silverstein’s contentions that time had expired in making the demand, and ruled that the proof of losses previously submitted by the leaseholder had been of a preliminary nature, as they were not complete and were subject to revision; therefore additional parties could join in demanding the appointment of appraisers.

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