Canadian Underwriter

Silverstein, insurers ordered to hire appraiser

August 22, 2002   by Canadian Underwriter

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In the ongoing battle between World Trade Center leaseholder and a group of insurers for the property, a New York federal judge has ordered the parties to hire an independent appraiser to value the complex, destroyed in the September 11 terrorist attacks.
Acting on a motion by Allianz Insurance Company, and over objections from Silverstein, the judge is ordering the appraisal and urging parties to come to a settlement on the claim.
Silverstein is seeking twice the limit of the policy, saying that the attacks represent two separate occurrences, which would cause a payout of about US$7 billion. Insurers argue that the attacks represent one occurrence.
More recently, Silverstein and insurers have disagreed on the value of the property, although at this time it remains to be seen whether Silverstein intends to rebuild. Swiss Re, one of the lead insurers on the property, has stated that an independent estimate by Pearson Partners valued the property at US$2.156 billion, and its own estimate is around US$2.4 billion.
Silverstein can opt to take a payout of the actual cash value or alternatively rebuild. Six plans for potential rebuilds released in July are all estimated to cost in the US$2 billion range.
A trial is set for November 12 in the case, with jury selection beginning November 4.

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