Silverstein and GMAC Settle WTC Dispute

April 15, 2002

Silverstein Properties, the master leaseholder of the WTC and General Motors Acceptance Corp. (GMAC), one of its principal lenders, have reportedly settled a dispute over the distribution of insurance proceeds relating to the destruction of the twin towers.

GMAC sued Silverstein in January, alleging that the company was keeping the lion’s share of insurance proceeds, rather than paying the amounts required as rent to the Port Authority, and as interest payments to lenders, notably GMAC, which had invested $560 million in loans to help Silverstein acquire the master lease.

According to a report from Reuters News Agency GMAC Commercial Mortgage will make funds available to Silverstein to help pay the company’s ongoing expenses. Details of what amounts GMAC would receive were not revealed, but it apparently has agreed to a dismissal of the lawsuit as part of the settlement.

Silverstein agreed in February to a settlement of all WTC related claims with ACE Ltd. and XL Capital, but the company remains locked in a dispute with Swiss Re and some 20 other insurance companies over the terms of the binding authorities they issued for the WTC complex just prior to its destruction. Around $3.7 billion is at stake, depending on whether the court finds there was one loss occurrence or two.

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