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In Reply to: WTC getting paid Actual Cash Value? posted by Sure-net.com on November 19, 2001 at 03:07:11:
SETTLEMENT OFFERS SUBMITTED IN WTC INSURANCE SUIT
August 08, 2002 05:08 PM ET By Philip Klein NEW YORK, Aug 8 (Reuters) -
World Trade Center leaseholder Larry Silverstein and
his insurers on Thursday submitted sealed settlement offers to a federal judge in New York in an effort to resolve their multi-billion
dollar lawsuit over insurance coverage for the Sept. 11 attacks without a trial. Silverstein has been battling with his 20 insurers over
whether the destruction of the Twin Towers represented two events, entitling him to more that $7 billion in claims, or one event,
leaving him with half that amount. This would be insufficient to both rebuild the complex and recoup lost rents.
Publicly, Silverstein and lead insurer Swiss Re RUKZn.VX have moved apart
in their valuations of the total insurance loss, and their
estimates now differ by about $6 billion. But nonetheless, both sides may be willing to reach a compromise to avoid the delay and
publicity associated with a protracted trial. The case has been complicated because at the time of the attacks, the details of the
insurance policy on the World Trade Center were not finalized. Under one insurance form written by London-based Willis Group
Holdings Ltd. WSH.N , the attack would be considered one event, but under the other policy form, written by Travelers Property
Casualty Corp. TAPa.N , it could be interpreted as two.
Lawyers for Swiss Re, which holds 22 percent of the insurance obligation,
have argued that the Willis form was clearly the dominant
form and that Silverstein's lawyers created the concept of two occurrences only after the Sept. 11 attacks. The Silverstein camp has
said that the Willis form was just a starting point for negotiations and that the Travelers form ended up becoming the dominant form
after banks insisted on it because Travelers had a high credit rating. Talk of a settlement comes as New York City has proposed
swapping ownership of its two airports with the Port Authority of New York and New Jersey in exchange for ownership of the World
Trade Center. The property of the complex is currently owned by the Port Authority, which leased it to Silverstein last year.
ABOUT FIVE BILLION DOLLARS APART - Silverstein has said through a spokesman
that he would cooperate with such a deal, but
it is unclear how that would affect how much say he has in the rebuilding process. The Port Authority has said repeatedly that he
has an important role to play, but his voice would likely be bolstered were he to gain a larger sum of insurance money. U.S. District
Court Judge Lewis A. Kaplan asked Silverstein's lawyers to submit a letter on Thursday with a minimum price they would settle for
and the insurers to offer their maximum price to see if the range is narrow enough to negotiate an out of court settlement.
"They'll be somewhere between four and five billion dollars apart," said
Swiss Re lawyer Barry Ostrager of the likely settlement
offers. "The insurers view the present settlement value of this to be in the low to mid $2 billion range, and if I believe anything
Silverstein said in the press, that's not going to get this done." Silverstein representatives would not comment on how likely a
settlement would be. "The Silverstein parties will negotiate in good faith," said Silverstein spokesperson Gerald McKelvey. Swiss Re
said its own experts had determined the true value of a claim on the World Trade Center at $2.4 billion. The Silverstein side said the
full value is $8.2 billon, with the complex alone worth $5.7 billion and business interruption totaling $2.5 billion. Even so, lawyers for
the broker Willis said a settlement is a real possibility.
"I'm sure there will be pressure exacted (by Judge Kaplan) on the parties,"
said Stuart Gerson, counsel for Willis Group Holdings Ltd. WSH.N , the insurance
broker which arranged Silverstein's WTC insurance policy. Willis is not a
party to the trial or settlement talks, but its employees have been heavily
questioned by both sides to establish the facts of how Silverstein's insurance
was arranged. "They are not all on the same track," said Gerson. "You may
have settlements with some (insurers) and not with all. But everybody lately
has pronounced their desire to resolve it. Most civil litigation settles."
If the case were to go to trial, the opening arguments are set to start on
Nov. 12 and will be heard before Judge John S. Martin. (with additional reporting
by Bill Rigby in New York)
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