Developer Sues to Win
$12.3 Billion in 9/11 Attack
By ANEMONA HARTOCOLLIS
Published: March 27, 2008
Larry A. Silverstein, who has won nearly
$4.6 billion in insurance payments to
cover his losses and help him rebuild at
the World Trade Center site, is seeking
$12.3 billion in damages from airlines
and airport security companies for the
Mr. Silverstein, the developer of ground
zero, sought the damages, whose amount
was not previously known, in a claim
filed in 2004, that says the airlines
and airport security companies failed to
prevent terrorists from hijacking the
planes used to destroy the buildings.
His case was consolidated last week with
similar, earlier lawsuits brought by
families of some victims of the attack
and by other property owners. But in
seeking $12.3 billion, he is by far the
biggest claimant in the litigation.
The size of Mr. Silverstein’s claim was
revealed last week at a status
conference on the litigation in United
States District Court in Manhattan.
The claims by the parties involved total
about $23 billion, and Mr. Silverstein’s
claim for such a large chunk could
jeopardize claims from other businesses
and property owners, according to
defense lawyers. A lawyer for the
victims’ families, Donald Migliori, said
he was confident that their claims would
not be affected because they would take
priority over the property claims.
A lawyer for the airlines, Desmond
Barry, said that if Mr. Silverstein won
his claim, he could push the total
claims beyond the amount of insurance
that the airlines and security companies
have available. “There ain’t that much
insurance,” Mr. Barry said.
The federal government has capped the
liability at the amount of available
insurance, to avoid bankrupting the
airlines. The exact amount of insurance
available is still being explored in the
Richard A. Williamson, a lawyer for Mr.
Silverstein, said at the court
conference on March 18 that Mr.
Silverstein was seeking damages to
compensate him for continuing losses at
the site. Mr. Silverstein, through his
company, World Trade Center Properties,
has a 99-year lease, worth $3.2 billion,
on four buildings at the site, including
the fallen twin towers. He signed the
lease in July 2001, just six weeks
before the attack.
Since the attack, Mr. Silverstein has
been paying rent to the Port Authority
of New York and New Jersey on towers
that no longer exist, his lawyer told
the judge, Alvin K. Hellerstein. Mr.
Williamson said that his client had also
lost rental income from about 400
Dara McQuillan, a spokesman for Mr.
Silverstein, said that the $12.3 billion
represented $8.4 billion for the
replacement value of the destroyed
buildings and $3.9 billion in other
costs, including $100 million a year in
rent to the Port Authority and $300
million a year in lost rental income, as
well as the cost of marketing and
leasing the new buildings.
Mr. Barry, speaking for the airlines,
contended that Mr. Silverstein had been
more than compensated by the nearly $4.6
billion insurance settlement, reached
after almost six years of litigation. He
argued that Mr. Silverstein was entitled
to the market value of the property,
which he said had been established by
the $3.2 billion lease.
Judge Hellerstein expressed skepticism
about Mr. Silverstein’s claim, and asked
why he had not stemmed his losses by
just “walking away.”
Turning to Mr. Williamson, Judge
Hellerstein asked: “What’s the nature of
To which Mr. Williamson replied, “For
damages suffered by the events of 9/11,
not value. Damages.”
Mr. Williamson said that the lease
required Mr. Silverstein to rebuild and
to continue paying rent.
“And so I’m putting to you if you walked
away from the lease, you would lose the
value of the lease,” Judge Hellerstein
said. “Would you have a further
obligation to pay money?”
Mr. Williamson replied, “You have to
examine that question. “But to me that’s
not the test of what are our damages.”
Judge Hellerstein pressed Mr. Williamson
to put a dollar figure on the damages.
“I don’t think it’s necessary to know
the precise amount,” the judge said. “I
think some order of magnitude would be
When Mr. Williamson balked, Mr. Barry
jumped in. “I think their claim is $12.3
billion,” he said.
“Plus prejudgement interest,” Mr.
To which the judge tartly replied, “We
shouldn’t forget that.”
Judge Hellerstein ordered Mr.
Silverstein to provide more
documentation of his claim, or risk
Mr. McQuillan, the spokesman for Mr.
Silverstein, said on Wednesday the
developer felt both an obligation under
his lease and a moral obligation to
rebuild, rather than walk away. He said
that the insurance companies who paid
him would be repaid if he prevails.
Plaintiffs also revealed that after a
spate of settlements, there are seven
wrongful death cases and two injury
cases remaining, out of more than 90
Those who sued represent just a small
fraction of the casualties on Sept. 11.
Most of the victims of the attack and
their families chose to take the
compensation offered through a federal
fund, forgoing their right to sue.
Mr. Migliori, the lawyer for victims’
survivors, said he believed that the
claimants with property-damage claims —
including Mr. Silverstein and some
insurance companies trying to recoup
their payments — would allow the death
and injury cases to get priority in
payment of damages.
The judge declined to set any trial date
in the case, saying that it would be
“fictitious,” but set a fact-finding
deadline at the end of this year. Any
trials in the case appear to be more
than a year away.