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On April 18, about 20 attorneys assembled before U.S. District Judge Pierre N. Leval for what promised to be an unusual hearing in the high-stakes dispute over the four Manhattan buildings connected with deposed Philippine leader Ferdinand E. Marcos.
It was the first court hearing since the current Philippine government "sold" the four coveted properties to an investment group led by developer Morris Bailey for $398 million. The government's attorneys were going to ask the court to authorize the sale even though the ownership of the property is the hotly contested issue of the trial.
But while most attorneys there were prepared for fireworks, no one expected what happened. After expressing skepticism over the Bailey transaction, Judge Leval asked lawyers representing the parties in the suit and the U.S. attorney's office to meet with him privately in chambers. About an hour later, a four-sentence order, handwritten by the judge, was distributed by the bailiff. "The parties shall discuss resolution," it instructed.
That innocuous sounding order represented the first time in the three-year-old case that the judge, who'd been serving mainly as a referee, began pushing for a settlement. And his action set the stage for the final determination of who owns the properties.
But at the same time, the court events on April 18 dimmed the hopes of the Philippine government that the judge would simply resolve the issue by approving the sale to the Bailey group. In fact, despite years of legal maneuverings, the buildings could still fall to any of a vast cast of characters.
The interests presented in the courtroom that day, which one lawyer likened to the cast of a Russian novel, included the Philippine government, which claims Mr. Marcos stole the money to buy the buildings from his country.
There were representatives of Adnan M. Khashoggi and Joseph Bernstein, who both claim that Mr. Marcos made deals with them involving the buildings before he was kicked out of office. Coincidentally, Mr. Khashoggi had been arrested that day in Bern, Switzerland, at the request of the U.S. attorney's office, which has charged him with falsifying documents in connection with his ownership claim.
Finally, in the courtroom that day were lawyers representing the Bailey group, the U.S. attorney's office, the banks...