Host Marriott Corp., the owner of the New York Marriott World Trade Center hotel, destroyed in the Sept. 11 attacks, has settled its claim with its insurers and will receive approximately $370 million in net settlement proceeds.
In conjunction with the agreement the company also surrendered the WTC site and terminated its ground lease rights, thus eliminating one more potential legal wrangle that could delay reconstruction of the WTC. Marriott is now free of any obligation to rebuild on the site, but has in exchange been given a right of first refusal, good for 20 years, to develop a hotel on the site.
A subsidiary, Marriott International, Inc., announced that it had already received “a $36.25 million payment from the property insurer for the New York Marriott World Trade Center hotel.” It indicated the amount had been paid “in connection with the loss of the hotel and the settlement of all outstanding matters related to the events of September 11, 2001.”
Marriott’s settlement brought good news to investors in the company as well, as it lowered projected loss forecasts and enabled the company to pay a fourth quarter dividend that it had indicated it planned to skip. Moody’s Investors Service responded by confirming its Ba3 ratings on the company’s senior unsecured debt and B3 preferred stock. It also ended its review of the company for a possible downgrade and assigned its ratings a “stable” outlook.
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