Court Gives WTC Developer Chance to Recoup More Money

A federal appeals court has given the developer Larry Silverstein a new chance to recoup more money for rebuilding the World Trade Center site in New York, on top of the $4.1 billion of insurance proceeds he has received.

The 2nd U.S. Circuit Court of Appeals said a lower court judge incorrectly calculated that Silverstein lost just $2.805 billion on his 99-year lease for the site, signed six weeks before the Sept. 11, 2001 attacks, and deserved no additional damages because insurance more than offset it.

The Sept. 17 decision by a three-judge panel clears the way for Silverstein and his World Trade Center Properties LLC to seek more damages from United Continental Holdings Inc., American Airlines Group Inc., and dozens of financial, real estate and security companies.

Silverstein wants those defendants held responsible for their alleged negligence in failing to prevent the destruction of the Twin Towers by hijacked United and American planes.

In a 70-page decision for the appeals court, Circuit Judge Debra Ann Livingston said the loss on Silverstein’s lease should reflect “pre- and post-attack market values, with the post-attack values measured as if the leased buildings were not reconstructed.”

She also directed U.S. District Judge Alvin Hellerstein, who oversees much of the Sept. 11 litigation and determined the $2.805 billion loss, to award Silverstein a higher rate of interest.

The appeals court did hand Silverstein a setback, rejecting his effort to recoup money for rebuilding costs and lost rents.

Although Silverstein was able to open One World Trade Center last November, he has said the lease obligated him to continue rebuilding, and that he remains billions of dollars short.

“Today’s decision re-opens the door for a jury to determine the extent of the airlines’ and security companies’ responsibility for their negligent actions on 9/11,” a spokesman for the developer said on Sept. 17. “The American public deserves a full and fair accounting.”

Roger Podesta, a lawyer for the defendants, was not immediately available for comment.

Circuit Judge Chester Straub partially dissented.

He said it was unclear whether New York law permitted Silverstein to recoup rebuilding costs, given his obligation to rebuild the site and the “public value” in doing so, and that the state’s highest court should be consulted.

Separately, the 2nd Circuit said United was not responsible for the destruction of 7 World Trade Center in the Sept. 11 attacks, because it was caused by the American flight.

The case is In re: September 11 Litigation, 2nd U.S. Circuit Court of Appeals, Nos. 13-3619, 13-3782.