Swiss Re has claimed in a letter and an announcement that Larry Silverstein’s demand for an immediate cash payment for the loss of one of the World Trade Center Towers (See IJ Website Nov. 8) is equivalent to a decision by his company, the master leaseholder, and the Port Authority of New York and New Jersey, the owners, not to rebuild.
“Under the terms of the Swiss Re insurance coverage, the insured parties can either make a claim for replacement costs and obtain payments towards reconstruction as rebuilding progresses, or they can elect not to rebuild and obtain an immediate cash out payment in the amount of ‘actual cash value’ of the insured property,” said the company’s statement.
Swiss Re America Holding Corp. CEO and President Jacques Dubois pointed out that the insurer had already made an initial payment earlier this month to Silverstein Properties to enable it to meet short term obligations, and stood ready to honor its policy commitments, but, continued Dubois, “By electing to recover an ‘actual cash value’ payment, Mr. Silverstein has apparently abandoned his plan to rebuild the World Trade Center.” He then went on to detail the payments that the insurers would make to the Port Authority, the lenders and “a lump sum payment of up to $1.3 billion” to Silverstein and his partners.
Barry Ostranger, a lawyer for Swiss Re, was even more succinct. According to Reuters News Agency he repeated the assertion that by electing the cash payment “they have renounced any intention to rebuild.” He compared the situation to auto insurance, pointing out that if an insured elects to receive the actual cash value, rather than the replacement cost, “the insurance company doesn’t have to pay to replace your car.”
The assertion brought a heated denial from Silverstein, who has steadfastly maintained that he intends to rebuild the World Trade Center. He also reiterated his position, which is the subject of a declaratory relief action in Federal Court, that two loss events occurred on Sept. 11, rather than one, and indicated that Swiss Re was backing away from its previous commitment to expedite WTC related claims.
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