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Gold9472
02-26-2008, 11:42 PM
Claims Limited In 9/11 Losses

http://online.wsj.com/article/SB120399491483492771.html?mod=googlenews_wsj

By CHAD BRAY
February 26, 2008; Page C7

The Port Authority of New York and New Jersey can pursue insurance payments for only one building at the World Trade Center complex and the train station underneath the property, instead of the entire property, a federal judge has ruled.

In an opinion dated Friday and made public yesterday, U.S. District Judge Barbara S. Jones in New York ruled that the authority can't pursue payments from its insurers for portions of the property that were leased to developer Larry Silverstein shortly before the terrorist attacks on Sept. 11, 2001.

The Port Authority's policy, taken out in June 2001, applied only to World Trade Center 6 and the PATH train station and not to the twin, 110-story towers and World Trade Center 4 and 5, which were leased to Mr. Silverstein in July 2001, the judge ruled.

Mr. Silverstein has recovered about $4.55 billion in insurance proceeds.

The Port Authority, which viewed its insurance policies as supplemental coverage when insurance obtained by the lessee was insufficient, had pursued payments for the entire property.

The authority, which has argued the terrorist attacks constituted two separate incidents, is seeking $2.7 billion related to WTC 6 and the PATH station.

The insurers, which include various Lloyd's of London underwriters, Swiss Reinsurance Co. and Allianz AG Holding, have paid about $950 million to the Port Authority related to WTC 6 and the PATH station. The authority's policy was capped at $1.5 billion per occurrence.

"We thought the contract was very clear on its face that this additional property was not covered under the Port Authority insurance," said Robert A. Skinner of Ropes & Gray LLP in Boston, who represented the London insurers. "We're pleased the judge ruled this way."

A Port Authority spokesman declined comment yesterday.