Silverstein Sues Travelers, Other WTC Insurers
By E.E. Mazier
NU Online News Service, Jan. 3, 4:29 p.m. EST?World Trade Center owner Larry A. Silverstein is suing the remaining insurers of the twin towers after negotiations over how much they would pay for the loss broke down.
Marc Wolinsky, one of Mr. Silverstein's attorneys, said that the 19 insurers involved were not originally named in legal action against Swiss Re because of settlement talks going on at that time. But those talks have since reached an "impasse," he said. Mr. Wolinsky is a partner at the New York law firm of Wachtell, Lipton, Rosen & Katz.
According to a release, World Trade Center Properties LLC, an affiliate of Silverstein Properties, filed an action in federal court in Manhattan last Friday against Travelers Indemnity Co., a subsidiary of Citigroup Inc.
Mr. Silverstein wants to recover losses stemming from the Sept. 11 demolition of the WTC by terrorists. His companies held a 99-year lease on the WTC property.
He also has requested permission of the same federal court to add 19 other WTC insurers as defendants in his ongoing battle with Swiss Reinsurance Co.
In the declaratory judgment action initiated last October by SR International Business Insurance Co., Ltd., a Swiss Re subsidiary, the excess insurer is seeking to have the collapse of the twin towers declared as one insurable event limited to a $3.5 billion payment.
Mr. Silverstein counter-sued Swiss Re for its 22 percent proportionate responsibility of more than $7 billion. Mr. Silverstein has taken the position that there were two terrorist attacks.
Early in November, Mr. Silverstein's companies filed a declaratory judgment action against Ace Bermuda Insurance Ltd. and XL Insurance Ltd. to try to keep the coverage dispute in the United States and out of hands of arbitrators in London.
A complicating factor in all of these lawsuits is that final insurance policies were not in place before Sept. 11.
Mr. Silverstein's court papers claim that the coverage to which Swiss Re and the other insurers committed themselves through binders and slips did not define the term "occurrence," and that this makes the definition a matter of common law.
His attorneys have said there are cases in New York that provide ample precedent to allow for treatment of the losses as two separate events under the state common law.
Mr. Silverstein contends that Travelers passed around its own form in June, which did not specifically define "occurrence." He has claimed that Swiss Re and other insurers were told about the Travelers form before they agreed on July 26 to participate in the World Trade Center insurance program.
As a result, according to Mr. Silverstein, most of those insurers also bound coverage based on the Travelers form.
Neither Travelers nor Swiss Re could be reached for comment.
But in an earlier statement, Jacques DuBois, Swiss Re Group executive board member, stated the belief "that under the Travelers form, and frankly under any insurance policy form, the World Trade Center attack constitutes one insurable loss."
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