World Trade Centre insurers sued over rebuilding

NEW YORK - In the latest twist in an acrimonious battle over rebuilding the World Trade Centre, developer Larry Silverstein today sued insurers to demand they pay for the buildings destroyed in the September 11 attacks.

With new architectural plans for the site to be unveiled this week, Silverstein and The Port Authority of New York and New Jersey said in a lawsuit that the insurance companies have dragged their feet on paying the more than $3.5 billion owed, are impeding the rebuilding process and trying to shirk their responsibilities.

"The financing of the redevelopment plan ... depends in large part from the property/rental value insurance," the latest lawsuit says. "The defendants, however, have persistently sought to shirk their contractual obligations to pay insurance coverage." Some insurers have suggested they might not make future payments owed for redevelopment because the original plan has been changed. Insurance companies named in the suit include units of St. Paul Travelers, Zurich American Insurance Co., Allianz AG and Swiss Re.

Alayna Tagariello, a spokeswoman for Swiss Re, said, "We reserve the right to review the final agreement, but as it stands now, we have no intention of doing anything but following our obligations." St. Paul Travelers spokeswoman Marlene Ibsen said the firm wants to meet with the plaintiffs.

"Our company has been and remains committed to funding the rebuilding of the World Trade Centre site to the full extent of our policy obligations."

Silverstein said in a statement, "The States of New York and New Jersey, the City of New York and the Port Authority have made it clear that they will not allow foot-dragging insurance companies to impede the ongoing revitalisation of downtown Manhattan. We expect a quick resolution that will force these insurers to finally pay what they owe." After infighting between architects, between Silverstein and the Port Authority and changes to plans over security concerns, the major parties to the deal agreed in April to a new master building plan at the 16-acre site.

Under that plan, Silverstein will build the 540-metre Freedom Tower, meant to symbolize the post-September 11 revival, then hand over the building to the Port Authority. Republican Mayor Michael Bloomberg has said a few insurers believed that change in ownership of the largest building on the site may violate their insurance covenants.

New plans will be unveiled on Wednesday for redevelopment at the 16-acre site, owned by the Port Authority and leased by Silverstein shortly before the attacks.

The lawsuit, filed in New York State Supreme Court, demands that insurers honour their payments even though rebuilding plans have changed. Silverstein and the insurers have still not resolved other lawsuits over how much the companies owe.

In a letter to the court, the Port Authority asked the court to hold a hearing before September 20 -- the day the authority meets to finally approve the rebuilding plan.

As part of the rebuilding deal, the Port Authority must find major government tenants to occupy much of the Freedom Tower, which experts have said may be problematic since the site has been attacked twice -- first in 1993 and then in 2001 in the September 11 attacks.

- REUTERS

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production apcf03 at 26 Dec 2014 01:34:50 Processing Time: 1042ms