Deutsche Bank, Insurers Settle Dispute Over Fate Of Building
Michael Ha
As the legal wrangling between the World Trade Center's leaseholder and his insurers over the Twin Towers destruction continues in court, another insurance dispute involving the Sept. 11, 2001, tragedy has come to a close, as Deutsche Bank AG reached a settlement to demolish its tower just south of the former WTC site.
Deutsche Bank reached a deal with its insurers, construction officials and other municipal authorities to demolish its tower at 130 Liberty Street in Manhattanthe last standing structure severely damaged by the Sept. 11 terrorist attack.
Under terms of the agreement, two insurers–Allianz AG and AXA–will together pay Deutsche Bank $140 million, while the Lower Manhattan Development Corp. (a state entity created to oversee downtown redevelopment) will buy the property from Deutsche Bank for $90 million and take over a $45 million contract to demolish the 40-story building. The two insurers said they would pay any additional demolition costs that go beyond the contract figure.
Together, Allianz and AXA were responsible for half of the aggregate coverage. Deutsche Bank's other two insurers–Zurich and Chubb Corp–settled with the bank last year. Terms of the settlement were not disclosed.
The point of contention has been whether the badly damaged tower could have been salvaged. Deutsche Bank has been arguing that the building needed to be demolished for environmental reasons, while the insurers contended that the tower was still salvageable.
Last August, Deutsche Bank filed a lawsuit against Allianz and AXA, discussing the environmental effects of dust from the collapsed WTC towers.
“The implosion of the South Tower generated tornado-force winds, which distributed fine dust from the destruction of the WTC into every nook and cranny of 130 Liberty Street through the 15-story gash and approximately 1,700 broken windows,” Deutsche Bank said in its complaint. The bank argued that such dust contains hazardous materialsincluding asbestos, lead, mercury, other heavy metals and PCBs.
Peter Gillon, an attorney and co-chair of national environmental practice at Greenberg Traurig LLP, headquartered in Miami, told National Underwriter that Deutsche Bank's complaint was unique in that it was one of the first of its kind in property-damage lawsuits to include environmental effects of Sept. 11-related contaminants.
Mr. Gillon said this was the first case that he was aware of that asserts environmental and health effects of exposures from dust and debris from the World Trade Center collapse.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, March 5, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.
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