Delaware officials have filed an order that approves the sale of U.K.-based Royal & SunAlliance’s U.S. operation, including language aimed at protecting the interests of the World Trade Center developer and other policyholders.
The approval action by Delaware Insurance Commissioner Matthew Denn came yesterday. In his order, Mr. Denn said Royal U.K. must submit to the personal jurisdiction of Delaware courts to resolve any claims brought by policyholders. Also, the parent company must submit to the authority of the insurance department regarding claims disputes.
Silverstein Group, which leased the Twin Tower complex shortly before it was destroyed on Sept. 11, 2001, has said the purchased unit, which is to be called Arrowpoint, would not have the money to pay what it owes them.
But Mr. Denn noted he approved the sale because the British parent said it would no longer support the subsidiary and was not required to.
Royal & Sun is Britain’s second-largest commercial insurer, and its U.S. operation was one of the World Trade Center insurers.
“The objectors would like me to gamble that I can get an even better deal by rejecting the application,” Mr. Denn said in the order. “Were I convinced that Royal U.K. would continue subsidizing its American subsidiaries indefinitely, in spite of its unequivocal statements to both the department and its own shareholders that it would not, I would deny it.”
Janno Lieber, Silverstein’s World Trade Center project director, said in a statement the developer was reviewing his options.
“The $250 million that Royal owes under the terms of its contract are vitally important to rebuilding the World Trade Center site–a goal shared by everyone except these insurance companies that refuse to live up to their moral and legal obligations,” Mr. Lieber said.
New York’s two U.S. senators have also stepped into the fray for fear the proposed new carrier spun off from its U.K. parent would not have the wherewithal to pay off claims relating the World Trade Center.
U.S. Senator Hillary Clinton, D-N.Y., wrote that “without Royal Indemnity Company’s full payment of its obligations, efforts to develop Ground Zero will be seriously impeded.”