Report Silverstein Sues GE Sub over Rebuilding 7 World Trade Center

May 8, 2003

Larry Silverstein has reportedly gone to court to try and recover an additional $420 million from Industrial Risk Insurers, a subsidiary of GE Capital, to complete the cost of rebuilding 7 World Trade Center.

The building, which contained mostly government offices, including the legal department of the Securities and Exchange Commission in New York, collapsed several hours after the twin towers as a direct result of the terrorist attacks, and reconstruction costs have been estimated at around $860 million.

According to a report from Reuters News Agency Industrial Risk has paid Silverstein $440 million, but has taken the position that it is not liable for additional payments, as the completion date for rebuilding the structure is 2006. This exceeds the time provision in the insurance policy that reconstruction of a destroyed or damaged building must be completed within two years.

Silverstein pointed out that rebuilding the structure within that time frame, especially in view of the even more extensive destruction caused by the collapse of the twin towers on the site contiguous to 7 WTC, was impossible.

An Industrial Risk spokesman countered that the policy did not cover all rebuilding costs, but only those applicable to what could be rebuilt in two years, and that the $440 million the insurer had paid reimbursed Silverstein for the proper amount. He also indicated that, despite the lawsuit, discussions were continuing with Silverstein concerning any additional payments.

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