Holdouts by Allianz, Royal Slowing Rebuilding of World Trade Center

October 22, 2006

Two insurers that owe more than $800 million in payments to the World Trade Center site developer will slow rebuilding if they don’t settle a lawsuit over how to divide the money, politicians and developers said last week.

The companies, Allianz Insurance Co. and Royal Indemnity Co., are the only insurers that haven’t agreed to divide their payments between site developer Larry Silverstein and the site’s owner, the Port Authority of New York and New Jersey, officials testified at a City Council hearing.

“New York cannot allow foreign insurance companies to renege on their obligations and further delay the rebuilding of the World Trade Center just to maximize their profits,” testified Janno Lieber, who oversees the trade center project for Silverstein.

Gov. George Pataki, the state insurance commissioner and other officials also called on the insurers not to delay their payments.

Allianz and Royal Indemnity were among seven insurers sued in June by the Port Authority and Silverstein, who argued that a new plan to have the Port Authority and Silverstein jointly rebuild office towers at the lower Manhattan site didn’t mean insurers could back out of their payments.

Royal Indemnity has paid $2.8 million and owes $253.2 million, Lieber said Thursday, while Allianz has paid $312.6 million and owes $552.5 million.

More than two dozen insurers took out policies with Silverstein weeks before the towers collapsed on Sept. 11, 2001. A federal appeals court on Wednesday upheld rulings that gave Silverstein a total of $4.6 billion in insurance proceeds.

Spokesmen for Allianz and Royal Indemnity didn’t immediately return telephone and e-mail messages. In a statement issued last month Allianz said the Port Authority “is not insured for replacement of the World Trade Center, and so Silverstein is asking Allianz, in essence, for a gift of hundreds of millions of dollars.” The company said then it had to follow the terms of its contract.

Was this article valuable?

Here are more articles you may enjoy.