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Developer Silverstein sues over WTC insurance cash

June 26, 2006

NEW YORK (Reuters) – World Trade Center developer Larry
Silverstein and the Port Authority of New York and New Jersey
on Monday sued insurers to demand that they pay up on the
buildings destroyed in the September 11 attacks.

Some insurers have suggested they might not make future
payments owed for redevelopment because the original plan has
been changed. Silverstein and the Port Authority, which owns
the 16-acre site, say the money is essential to rebuilding.

The lawsuit, filed in the Supreme Court of the State of New
York, demands that the insurers honor their payments even
though an initial rebuilding plan was replaced by a new one
agreed to in April.

The insurance companies named in the suit include St. Paul
Travelers, Zurich American Insurance Co. and Allianz AG.

Silverstein leased the World Trade Center shortly before
the attacks and has the right to rebuild the complex. The
developer and the insurers still have not resolved other
lawsuits over how much the companies owe.

“The financing of the redevelopment plan … depends in
large part from the property/rental value insurance,” the
latest lawsuit says. “The defendants, however, have
persistently sought to shirk their contractual obligations to
pay insurance coverage.”

Silverstein and the Port Authority said in the suit that
they are seeking to establish that the reworked plan to develop
the site “cannot provide an excuse for any defendant to avoid
its obligations.”

The lawsuit in the latest twist in almost five-years of
wranglings between Silverstein and the insurance companies
since the twin towers were destroyed in the September 11
attacks.

Clashes over designs and security have repeatedly stalled
rebuilding and many of the latest fights have also revolved
around the financing.

Republican Mayor Michael Bloomberg has said a few insurers
believed Silverstein’s new pact violated their insurance
covenants because he will no longer own the Freedom Tower.

Instead, the Port Authority now will own the 1,776-foot
Freedom Tower, meant to symbolize the post-September 11
revival, although Silverstein will still build it.


Source: reuters



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