MANHATTAN (CN) – Businesses that leased World Trade Center buildings say they should get dibs on the confidential settlement their insurers reached on Feb. 25. World Trade Center Properties and its subsidiaries 1, 2, 3 and 4 World Trade Center, still face significant unreimbursed losses even after getting billions through insurance recovery, according to the federal complaint.
Larry Silverstein, who owns the Delaware-based World Trade Center Properties, won more than $4 billion from the insurance companies and has a lawsuit pending against the airlines and security companies. Silverstein sued the airlines for $12.8 billion in 2004, but last year the court put a $2.8 billion cap on the claim so it would not bankrupt the airlines.
“The WTCP plaintiffs have received insurance proceeds for some of their losses, but these insurance proceeds have not been nearly enough to make the WTCP plaintiffs whole,” according to the complaint.
(The New York Times reported in 2008 that insurers owed WTC Properties a maximum of $4.6 billion; Crain’s reported in 2009 that the amount was $4.1 billion.)
WTC Properties claims it is “saddled with uninsured losses not paid under this contact,” including substantial sums of prepaid rent and lost rent from more than 400 tenants.
Six weeks before the Sept. 11 terrorist attacks, Silverstein completed the largest real estate transaction in New York history when he signed a 99-year lease on the World Trade Center for $3.25 billion, according to the WTC Properties Web site.
Under Silverstein’s lease, he is obligated to rebuild the World Trade Center offices, which he describes as “a $7 billion project that will consume the balance of his working life.”
Companies that insured WTC Properties also sued the airlines for subrogation, “in spite of the fact that the WTCP plaintiffs have not yet been made whole,” according to the complaint.
WTC Properties says it has priority on distribution of settlement proceeds sought by Great Lakes Reinsurance, Lloyd’s London, QBE International Insurance, Industrial Risk Insurers and Allianz Global Risks US Insurance.
On Feb. 25, the insurance companies moved for confirmation of the “confidential settlement agreement and mutual release of claims,” according to the complaint.
WTC Properties says the settlement will violate terms of multiple insurance policies and common law principles.
Under the contracts with Great Lakes, Lloyd’s and QBE, which are all based in England, WTC Properties says it is entitled to the entire settlement recovery.
The contract with the Connecticut-based Industrial Risk Insurers and the California-based Allianz provides that WTC Properties receive an “appropriate share” of any settlement proceeds, according to the complaint.
World Trade Center Properties is represented by Jason Cohen with Flemming Zulack Williamson Zauderer.