$2B WTC insurance battle comes to end.

World Trade Center developer Larry A. Silverstein this week thanked Governor Eliot Spitzer the government leaders who helped bring his five-year insurance battle to a close.

Governor Spitzer and State Insurance Superintendent Eric R. Dinallo announced that Silverstein Properties and seven insurance companies have reached a $2 billion settlement of all outstanding insurance claims arising from the destruction of the World Trade Center.

The agreement, the largest in regulatory history, ends almost six years of legal battling and removes the last major obstacle to restarting development at Ground Zero.

"The Governor and Superintendent Dinallo deserve huge credit for recognizing the importance of sealing all outstanding insurance issues, and their tireless work made sure we got it done," said Silverstein. "This agreement puts to rest the last uncertainty about the World Trade Center redevelopment, and will allow rebuilding to continue moving full steam ahead.

"I am enormously grateful to the Spitzer Administration and the many other government leaders who have pushed for an equitable insurance resolution over the past five and a half years--especially Assembly Speaker Shelly Silver, Senators Chuck Schumer and Hillary Clinton, Mayor Michael Bloomberg, Congressman Anthony Weiner, Congressman Jerry Nadler, Councilman Alan Gerson and Comptroller Bill Thompson."

With these insurance claims resolved, Silverstein Properties and the Port Authority can now obtain the necessary financing and meet the aggressive construction schedule that all agreed was essential for the rebuilding of Ground Zero.

Silverstein Properties, Inc. leased the World Trade Center from the Port Authority in July 2001. When the planes destroyed the twin towers on September 11, insurance policies for the Trade Center had not been finalized. Suits were filed in October 2001 to resolve disputes over how much the insurance companies owed. The courts eventually determined that the most Silverstein Properties could collect was $4.68 billion. Until now, the insurance companies have paid about half of that total, leaving the remaining sum in dispute.

Beginning in late March, Superintendent Dinallo held dozens of meetings with Silverstein Properties and the insurance companies. This month, when several outstanding issues remained unresolved, Governor Spitzer became personally engaged in the negotiations. The insurance companies involved in the settlement are Travelers Companies, Inc., Zurich American Insurance Company, Swiss Reinsurance Company, Employers Insurance Company of Wausau, Allianz Global Risks US Insurance Company, Industrial Risk Insurers (now owned by Swiss Reinsurance Company) and Royal Indemnity Company.

As part of the agreement, Silverstein Properties and the insurance companies have signed confidentiality agreements requiring that specific amounts paid by each company will not be disclosed. The total for all seven companies is $2 billion.

In September 2006, Silverstein Properties and the Port Authority achieved a global agreement for comprehensively rebuilding the World Trade Center site. The agreement called for the Port Authority to construct Towers 1 and 5, for Silverstein Properties to construct Towers 2, 3 and 4 along the eastern portion of the site, and for the Port Authority to prepare the "East Bathtub" foundation for construction of those towers.

In order to help finance this rebuilding, Silverstein Properties and the Port Authority agreed to a split of the remaining insurance proceeds of approximately 56% to Silverstein and 44% to the Port Authority. The two sides have spent hundreds of millions of dollars on legal fees and other court-related costs. The agreements will save additional tens of millions in legal costs and allow the Port Authority and Silverstein Properties to focus on rebuilding at Ground Zero.

"It is essential that the rebuilding at the World Trade Center site proceed as quickly as possible," said Governor Spitzer.

"The unsettled insurance claims were the last major barrier to rebuilding and have been bitterly and intensely contested for almost six years. The settlement is the result of an extensive collaborative effort by many and it ensures that the Port Authority and Silverstein Properties will have the financial resources to meet their obligations and rebuild at the Trade Center site in a way that will make all New Yorkers proud."