A New York developer hoping to rebuild the destroyed World Trade Center Monday won a major victory against his insurers, when a jury decided the hijacked airline attacks of Sept. 11, 2001, were two separate events.
The verdict in U.S. District Court in Manhattan means the site’s leaseholder, Larry Silverstein, could get twice as much money from his policies with the nine of the twin towers’ insurers to finance new construction.
Silverstein, who signed his lease just six weeks before the towers were destroyed, said he was “thrilled” by the decision. One of the insurers, Allianz AG, said it was “disappointed” and pledged it would appeal the verdict if necessary.
Silverstein has fought the insurance companies in court with the argument that he was owed $7 billion -- double the amount of his $3.5 billion policy -- on the grounds that the attacks on the towers were two separate events.
Even winning this case, the most he could realize is less than $5 billion. Under this decision, he could get $2.2 billion but a separate appraisal phase is still pending that could affect that payout.
Silverstein has vowed to restore 10 million square feet of office space on what has become known as Ground Zero.
The verdict by the jury after 11 days of deliberations ”will ensure a timely and complete rebuild of the World Trade Center,” Silverstein said.
“I strongly felt, and the jury agreed, that the destruction of the Twin Towers by two separate airplanes at two separate times was two separate occurrences and that these insurers have an obligation to pay their fair share to help make Lower Manhattan whole again,” he said in a statement.
Silverstein, one of New York’s best-known developers, leased the 16-acre complex that was destroyed by Islamic militants who flew two hijacked planes into the landmark towers. Nearly 2,800 people died and the buildings collapsed.
Double the insurance
This was the second trial resulting from Silverstein’s efforts to collect double the insurance he bought from a syndicate of 23 carriers two months before the trade center was destroyed.
He lost a first round in May when a jury ruled in favor of a dozen or so insurers, including the largest insurer, Swiss Re, and decided the attack by the two hijacked planes was one event, not two events as Silverstein argued.
The case involves: Allianz Global Risks U.S. Insurance Co., a unit of German insurer Allianz AG; Travelers Indemnity Co. and Gulf Insurance Co., now both part of St. Paul Travelers Cos. Inc.; Industrial Risk Insurers, owned by General Electric Co.; Royal Specialty, owned by British insurer Royal & SunAlliance at the time of the attack; TIG Insurance Co., a unit of Canada’s Fairfax Financial Holdings Ltd.; Tokio Marine and Fire Insurance Co., part of Japan’s Millea Holdings Inc.; Twin City Fire Insurance Co., a unit of Hartford Financial Services Group Inc. and Zurich American Insurance Co., a unit of Swiss insurer Zurich Financial. A portion of Allianz’s policy was covered by French reinsurer Scor .
Allianz spokeswoman Sabia Schwarzer said the company would ”press forward with a court-supported appraisal process that we believe will establish that the Silverstein parties did not sustain covered losses in excess of one policy limit.”
She said Allianz would “pursue all our legal remedies, including, if necessary, an appeal to the second-circuit court of appeals.”