Federal jury returns partial verdict in Silverstein trial.

Larry Silverstein will have $1.05 billion less to pay for the rebuilding of Ground Zero, after a federal jury issued a partial verdict last week.

The jury found that eight of the World Trade Center insurers were bound by an insurance form that defined the Sept. 11 attacks as one occurrence.

The panel, however, did not reach a verdict on the lead insurer, Swiss Re International, which has $877.5 million worth of coverage on the trade center per occurrence.

Judge Michael Mukasey accepted their partial verdict and ordered them to resume deliberations this week on Swiss Re's coverage.

Silverstein, who earlier had been banned from the trial for violating a judge's gag order by speaking to reporters, issued a statement through his spokesman.

"This is a partial verdict," said Howard Rubenstein, a Silverstein spokesman. "We are awaiting the decision with respect to Swiss Re, the largest insurer in the World Trade Center coverage. We will have no further comment while the jury continues to deliberate."

With the eight insurers only paying half--$1.06 billion instead of $2.12 billion--the most Silverstein could receive from the remaining insurance companies would be about $5.5 billion.

In a future phase of trial, the payout for three other insurance companies--Zurich American Insurance Company, Royal Indemnity Company and Twin City Fire Insurance company--will be determined. Those three will join seven other insurance firms involved in the litigation. The verdict will be either $175.8 million or $351.6 million, barring appeals.

Silverstein sought double payments from 19 of the 24 insurance companies, or a combined $7 billion. Five companies settled for $477 million before the trial.

During the 10-day trial, Silverstein's lawyer, Herbert Wachtell, claimed the insurers had been switched to another policy form, issued by Travelers Property Casualty Corp, prior to the attacks.

However, underwriters for the various insurers testified again and again that they were never told about the switch.

Without sufficient funds to rebuild the entire WTC site, Silverstein may need to seek additional funding from other companies or governmental agencies.

The federal government has already pledged funds for the $2 billion transit center downtown, as well as partial funds for the memorial site, museum and performing arts center, according to published reports.

The federal government may also aid Silverstein Properties in rebuilding other structures at the site, as they helped the airline industry after Sept. 11, said William Shanahan, an executive vice president and top investment sales specialist for CB Richard Ellis, who told REW the verdict was "obviously, not good news for Larry."

Although the government wants the site rebuilt quickly, Shanahan said a likely appeal could slow the process further.

"All this litigation keeps holding up time frames on ultimately when this will get resolved, which may impact when it gets built," Shanahan said.