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World Trade Center developer gets new chance for damages

World Trade Center developer gets new chance for damages

(Reuters) — A federal appeals court has given 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 in New York said a lower court judge incorrectly calculated that Mr. 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.

Thursday's decision by a three-judge panel clears the way for Mr. Silverstein and his World Trade Center Properties L.L.C. to seek more damages from United Continental Holdings Inc., American Airlines Group Inc. and dozens of financial, real estate and security companies.

Mr. 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 Airlines planes.

In a 70-page decision for the appeals court, Circuit Judge Debra Ann Livingston said the loss on Mr. 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 Mr. Silverstein a higher rate of interest.

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

Although Mr. 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. "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 Mr. 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.

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