Federal District Court Judge John S. Martin, sitting in Manhattan, ruled today against Mr. Silverstein's companies, which hold a 99-year lease on the property, and in favor of Travelers Indemnity Co. on a summary judgment motion.

A favorable ruling for the Silverstein companies would have saved them from going to trial. This, in turn, would have eliminated the need to convince a jury that the Sept. 11 Trade Center destruction by terrorists constituted two insurance events, not one, as maintained by various insurers involved in the consolidated litigation.

As noted in the opinion, the Silverstein companies sued the Hartford, Conn.-based Travelers for its proportionate share of coverage for the WTC, or $211 million "per occurrence."

According to the judge, the Silverstein motion claimed that, because Travelers had not defined "occurrence" in the policy--which was negotiated before but issued after Sept. 11--the insurer had agreed to be bound by the New York common-law definition of the term.

Travelers countered that the term has a clear, unambiguous meaning under New York law and that it refers to "immediate, efficient, physical, proximate cause of the loss, not some indirect or more remote cause."

Additionally, since no policy was in place on Sept. 11, Travelers argued that the court had to consider extrinsic evidence of the parties' negotiations to determine what the parties had in mind regarding the meaning of "occurrence."

In the end, Judge Martin found that there were too many questions that were inappropriate to resolve on summary motion.

Judge Martin noted that while the motion before him involved only Travelers, his reasoning "is of vital interest to the other insurers" sued by Mr. Silverstein in connection with the toppling of the Twin Towers by terrorists.

Howard Rubinstein, a spokesman for the Silverstein companies, said in a prepared statement that the ruling disappointed the companies, but that they were confident of prevailing at trial.

"We expect that the trier of fact will conclude that the terrorist attacks of Sept. 11 at the World Trade Center--in which two separate airplanes hit two separate buildings, causing two separate fires and ultimately two separate building collapses--constituted two separate occurrences under our property insurance policies," Mr. Rubinstein said.

In contrast, New York-based Swiss Re, another WTC litigant, expressed satisfaction with the court ruling.

"We are pleased that Judge Martin has determined that the facts in the Silverstein vs. Travelers case merit a jury trial," said a Swiss Re spokesman.

"We remain confident that it will confirm our position that the World Trade Center was insured as one property complex, was the target of one coordinated terrorist attack and represents one insurance loss," the spokesman added.