Swiss Re files lawsuit against Silverstein prop

Real Estate Weekly, Oct 31, 2001 by Parke Chapman

The single biggest insurer of the World Trade Center has sued the building's management, claiming that the management is asking for too much money.

The Silverstein Group is seeking $7 billion to rebuild the Trade Center. Each tower was valued at $3.5 billion for insurance purposes.

SWISS RE, one of 22 insurers of the trade center, filed its suit last week and has asked the judge to declare the two terrorist attacks one isolated incident that amounted to one single insurable event.

Silverstein has said that each attack constituted a separate incident covered by $3.5 billion.

Swiss Re has suggested that Silverstein underinsured the Trade Center by taking out only $3.5 billion to insure property that was worth more than $5 billion over three years.

In a New York Times report, the spokesman For Larry Silverstein said that "the suit is absolutely without merit."

Swiss Re is the world's second largest reinsurance company. Out of the 22 insurers involved in the Trade Center insurance, Swiss Re stands to pay the most.

According to the Times, there was no insurance policy yet issued on the properties when they were destroyed. That policy was under negotiation at the time the buildings collapsed.

Silverstein and Westfield America Inc. reached a $3.21 billion agreement in May on a long-term lease for the 110-story World Trade Center.

The 99-year lease deal, struck with the Port Authority of New York and New Jersey, was called the largest real estate transaction in New York City's history. The net lease covered four buildings at the complex, including the twin towers and the retail mall. Westfield, which owns shopping centers, handled the retail space under the agreement.