US judge caps insurance payout for 9/11 WTC attack: Knowledge Driven Revolution

Insurers of World Trade Center buildings destroyed in the Sept. 11 attacks won a victory when a federal judge on Tuesday ruled they need not pay developer Larry Silverstein an extra $700 million to make a rebuilt complex better than it was.

Judge Harold Baer of the U.S. district court in Manhattan said the three "replacement cost" policies capped payouts at what it would cost to rebuild the site as it stood prior to Sept. 11, 2001, when two hijacked planes struck the Twin Towers.

He rejected arguments by developer Silverstein Properties Inc. that it should recover the additional $700 million to build a "safe, modern, and politically palatable" complex.

"Insurance against technological change and shifts in the political winds may very well exist in the marketplace," Baer wrote in his 26-page decision. "But no court has ever found that such coverage is included in a replacement-cost policy.

"The most the insureds can recover on a replacement cost basis is the amount it would cost to reproduce the WTC beam-for-beam, pane-for-pane, as it stood early on the morning of September 11, 2001," Baer added.

Tuesday's decision is one step in a battle between insurers and Silverstein to determine how much the site is worth. An appraisal process is ongoing.

Among the insurers were affiliates of Allianz AG Holding (ALVG.DE: Quote, Profile, Research), St. Paul Travelers Cos (STA.N: Quote, Profile, Research), Swiss Re (RUKN.VX: Quote, Profile, Research) and Zurich Financial Services AG (ZURN.VX: Quote, Profile, Research).

"This is a big loss in dollar terms for Silverstein," said Tom Baker, director of the Insurance Law Center at the University of Connecticut School of Law. "It will certainly be appealed."

Silverstein signed a 99-year lease on the World Trade Center site from the Port Authority of New York and New Jersey six weeks before the attacks.

Bud Perrone, a spokesman for Silverstein, said in a statement: "Today's ruling will not affect the total amount of insurance available to rebuild the World Trade Center, or negatively impact the timetable for construction."

Perrone could not immediately say whether there would be an appeal.

A Port Authority spokesman also said the ruling will not affect the rebuilding schedule.

STRETCHING CREDULITY

Baer said it "stretches credulity" to suggest the insurers would agree to the $700 million payout without being explicit.

The judge also said it would be difficult to determine an appropriate payout given that Silverstein is not rebuilding the Twin Towers as they existed.

"The insurers should be generally pleased with the decision," said Barry Ostrager, a partner at Simpson Thacher & Bartlett LLP, who represents Swiss Re affiliate Industrial Risk Insurers. "Judge Baer interpreted the policy language as the insurers thought it was written."

Reconstruction has been delayed by litigation, as well as emotional and design concerns over what the site should look like and represent.

The current, $11-billion reconstruction plan anticipates the building of four skyscrapers, including a 1,776-foot (541-meter) Freedom Tower open to tenants by 2012.

"The judge wrote that the builder has an obligation under the contract to rebuild under current standards," Baker said. "But even if the judge is wrong on that point, the insurers have other policy exclusions that most likely would block the additional payout."

In a related case, a federal appeals court on Oct. 18 said Silverstein was eligible to receive less than $5 billion to rebuild.

Other insurers bound by the policies included Allianz Global Risks U.S. Insurance Co., Gulf Insurance Co., Royal Indemnity Co., Travelers Indemnity Co. and Zurich American Insurance Co.

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HOME Canadians Should Pay NOT to be Poisoned: NDP V for Vendetta - R for Reality Canadian Bird Flu Pandemic Looming ? Shill of the Week: Stephan Harper Aspartame: The Sweetest Killer Chicken Little Terrorist of the Week: Creating Fake Terrorists Shill of the Week: Paul Martin The Number 1 Reason YOU became a Slave	US judge caps insurance payout for 9/11 WTC attack Jonathan Stempel - Reuters via StopLying.ca November 06, 2006 Insurers of World Trade Center buildings destroyed in the Sept. 11 attacks won a victory when a federal judge on Tuesday ruled they need not pay developer Larry Silverstein an extra $700 million to make a rebuilt complex better than it was. Judge Harold Baer of the U.S. district court in Manhattan said the three "replacement cost" policies capped payouts at what it would cost to rebuild the site as it stood prior to Sept. 11, 2001, when two hijacked planes struck the Twin Towers. He rejected arguments by developer Silverstein Properties Inc. that it should recover the additional $700 million to build a "safe, modern, and politically palatable" complex. "Insurance against technological change and shifts in the political winds may very well exist in the marketplace," Baer wrote in his 26-page decision. "But no court has ever found that such coverage is included in a replacement-cost policy. "The most the insureds can recover on a replacement cost basis is the amount it would cost to reproduce the WTC beam-for-beam, pane-for-pane, as it stood early on the morning of September 11, 2001," Baer added. Tuesday's decision is one step in a battle between insurers and Silverstein to determine how much the site is worth. An appraisal process is ongoing. Among the insurers were affiliates of Allianz AG Holding (ALVG.DE: Quote, Profile, Research), St. Paul Travelers Cos (STA.N: Quote, Profile, Research), Swiss Re (RUKN.VX: Quote, Profile, Research) and Zurich Financial Services AG (ZURN.VX: Quote, Profile, Research). "This is a big loss in dollar terms for Silverstein," said Tom Baker, director of the Insurance Law Center at the University of Connecticut School of Law. "It will certainly be appealed." Silverstein signed a 99-year lease on the World Trade Center site from the Port Authority of New York and New Jersey six weeks before the attacks. Bud Perrone, a spokesman for Silverstein, said in a statement: "Today's ruling will not affect the total amount of insurance available to rebuild the World Trade Center, or negatively impact the timetable for construction." Perrone could not immediately say whether there would be an appeal. A Port Authority spokesman also said the ruling will not affect the rebuilding schedule. STRETCHING CREDULITY Baer said it "stretches credulity" to suggest the insurers would agree to the $700 million payout without being explicit. The judge also said it would be difficult to determine an appropriate payout given that Silverstein is not rebuilding the Twin Towers as they existed. "The insurers should be generally pleased with the decision," said Barry Ostrager, a partner at Simpson Thacher & Bartlett LLP, who represents Swiss Re affiliate Industrial Risk Insurers. "Judge Baer interpreted the policy language as the insurers thought it was written." Reconstruction has been delayed by litigation, as well as emotional and design concerns over what the site should look like and represent. The current, $11-billion reconstruction plan anticipates the building of four skyscrapers, including a 1,776-foot (541-meter) Freedom Tower open to tenants by 2012. "The judge wrote that the builder has an obligation under the contract to rebuild under current standards," Baker said. "But even if the judge is wrong on that point, the insurers have other policy exclusions that most likely would block the additional payout." In a related case, a federal appeals court on Oct. 18 said Silverstein was eligible to receive less than $5 billion to rebuild. Other insurers bound by the policies included Allianz Global Risks U.S. Insurance Co., Gulf Insurance Co., Royal Indemnity Co., Travelers Indemnity Co. and Zurich American Insurance Co. Read the full article here Broken Link? If the link to the original article is broken or has been altered you can view the article by clicking here. About KDR \| \| Home \| \| Weekly Features Archive	Weekly Features Archive
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