Silverstein broadens WTC legal campaign

Real Estate Weekly, Jan 9, 2002 by Parke Chapman

Silverstein Properties broadened its effort to recover over $7 billion worth of insurance proceeds by suing primary insurer Traveler's Indemnity Company last week. Silverstein also seeks to add 18 other insurers to the litigation already in progress against Swiss Re. To do this, however, the judge must amend Silverstein's counterclaim in the Swiss Re action.

The suit against Travelers was filed last week in New York federal court, charging that the separate attacks were two isolated incidents resulting in two $3.55 billion recoveries. Silverstein has reportedly said that his business has incurred approximately $2 billion in losses from the business interruption.

Swiss Re, Travelers and over 20 other insurance companies participated in a $3.55 billion "per occurrence" insurance program on the World Trade Center complex that was finalized in late July 2001.

On Oct. 22, Swiss Re filed suit claiming that the attacks constituted one single $3.55 billion insurable event. They claimed in their suit that they could rely on a special definition of the word "occurrence" included in a form that was circulated to several insurance carriers on June 25.

But Silverstein and the Port Authority's counterclaims against Swiss Re alleged that the form was superseded by another form prepared by Travelers Indemnity. This form didn't include the special definition of "occurrence." Also, Silverstein advised Swiss Re of this in an e-mail sent on July 23.

Swiss Re admitted in the suit that it did receive the e-mail, which included a copy of the Travelers form.

Under the current schedule, the issue will be submitted to the court for decision at the end of February 2002.