Deutsche Bank (DB) has filed suit against Allianz and AXA over a claim for damages to its building at 130 Liberty Street in New York City caused by the collapse of the World Trade Center towers. The suit, filed in New York Sate Supreme Court in Manhattan, claims that the damage is so severe that the entire building must be razed and reconstructed at an estimated cost of $1.9 billion.
DB acquired the property, which was built in 1974, when it purchased Bankers Trust in 1999, but the bank had no offices located there when the attacks occurred. The building carried policies totaling $1.715 billion in coverage, with Allianz and Chubb having a 30 percent share and AXA and Zurich 20 percent. DB had earlier reached an agreement with Chubb and Zurich based on a “total loss” estimate of $1.05 billion, and has been in negotiations with Allianz and AXA in efforts to reach a similar accord.
The two companies, however, have refused to recognize the building as a total loss, and have estimated that it could be cleaned and structurally repaired for around $500 million. According to news reports the building, which faced the twin towers, sustained significant damage when they collapsed, most prominently a 15-story gash. The dust and debris also contained significant amounts of asbestos, and the property is now said to be infected with mold.
DB is seeking the full amount of the claim from AXA and Allianz, a total of $858 million. However, the companies maintain that payment for the damages are all that is required of them under policy terms. According to a report from Reuters, an Allianz spokeswoman indicated that although “there may be very good reasons for the building to come down,” her company’s obligation is “to reimburse Deutsche Bank with insured losses associated with damage. But that’s all.”
The insurers have reportedly offered to settle the claim for $315 million and $210 million respectively, a total of $525 million, based on the same agreement concluded with Chubb and Zurich, but DB has so far apparently refused a settlement on this basis. While the $333 million difference is a significant amount, it pales in comparison to the approximately $3.1 billion at issue in the lawsuit between Silverstein Properties and Swiss Re and other insurers over the amount of the loss to be paid for the twin towers.
Was this article valuable?
Here are more articles you may enjoy.